Walmart One of the Most Defensive Names in Coverage Universe, Says RBC Capital
2022.05.13 21:11
By Sam Boughedda
Investing.com — Walmart Inc’s (NYSE:WMT) high grocery exposure and commitment to keeping prices low for consumers make it one of the most defensive names in RBC Capital’s coverage universe, analyst Steven Shemesh said Friday.
Shemesh reiterated an Outperform rating and $160 price target on Walmart, ahead of its earnings before the bell, May 17th.
The RBC Capital analyst made the assessment after utilizing Numerator Insights data to project sales, which he said has historically had a 90% correlation to Walmart sales.
For the first quarter, the data points to comparable sales of +2.5% compared to a consensus of +1.8%, the analyst said.
He added that based on industry read-through, they “believe growth slowed throughout April as the company lapped stimulus/unemployment benefits and as inflationary pressures adversely impacted consumption trends.”
“For 1Q, we are modeling Walmart U.S. comp growth of +2% (cons. +1.8%) and EPS of $1.46 (cons. $1.48). Based on our channel work we think our estimates are reasonable,” wrote Shemesh.
After initially rising on Friday, Walmart shares are now down 0.25%.
