Walmart shares have pulled back, but Bank of America is telling investors the move may have created a fresh opportunity in one of retail’s biggest names.
In a Bank of America note given to TheStreet, analyst Christopher Nardone reiterated a Buy rating on Walmart (WMT) while lowering the firm’s price objective to $144 from $150. The new target still implies 18.7% upside from the $121.34 price listed in the note, giving the call a bullish tone even as the analyst acknowledged a more challenging backdrop for consumers.
The firm’s argument rests on a familiar Walmart advantage that can become more powerful when shoppers get cautious. As consumers focus more on price, Bank of America expects Walmart to keep gaining share, supported by its scale, value positioning, e-commerce business, marketplace growth, and alternative revenue streams.
Bank of America sees Walmart gaining share
Bank of America said the current environment is “ripe” for Walmart to gain share as price-conscious shoppers look for value across grocery, general merchandise, and household categories. The firm expects those share gains to accelerate and help Walmart return to a beat-and-raise cycle, assuming the freight environment does not get worse.
Walmart recently raised its full-year net sales guidance to the high end of its 3.5% to 4.5% constant-currency range, according to the note. The increase reflected the company’s first-quarter beat and expectations for 4% to 5% growth in the second quarter.
Bank of America also pointed to Walmart’s pricing strategy as a key piece of the story. The firm said Walmart is “playing offense” with rollbacks up 20% year over year in the first quarter, while it expects pricing gaps to hold or narrow.
That strategy could become even more important if fuel costs stay elevated. Bank of America said the retail industry could see higher retail price inflation in the second half of the year, but it expects Walmart to be the last to raise prices.
The firm said recent food-at-home inflation has already widened price gaps, especially since Walmart has not taken price in the same way other retailers may need to. Bank of America expects second-quarter like-for-like inflation to look similar to the first quarter’s 1.2% rate in Walmart U.S., with general merchandise inflation moving lower sequentially and food inflation rising as egg deflation laps.
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Walmart has a playbook for higher costs
The biggest concern in the note centers on freight. Walmart reiterated its full-year operating profit growth guidance of 6% to 8%, even with roughly $1 billion in incremental costs tied to higher fuel, assuming rates hold.
Bank of America sees that as manageable because Walmart dealt with a similar set of external pressures last year. The firm said fiscal 2026 offers a playbook for how Walmart can absorb unexpected headwinds, after the company handled more than $1 billion in pressure from higher claims expense and tariffs while still delivering 5.4% constant-currency operating income growth.
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That result came in above Walmart’s original 3.5% to 5.5% operating income growth guidance, according to the note.
The firm also cited momentum in categories including fashion, beauty, and home, suggesting Walmart’s gains are reaching beyond grocery. That detail could help investors look at Walmart as more than a defensive food and household staples retailer.
Walmart’s third-party marketplace sales rose 50% in the first quarter, according to Bank of America, as the company continues adding assortment and improving delivery speeds. That growth supports the firm’s broader view that Walmart’s business mix is becoming more durable.
Alternative revenue streams keep supporting Walmart
Bank of America said Walmart’s alternative revenue streams are still “firing on all cylinders,” with e-commerce, membership, marketplace, advertising, and fulfillment services all supporting the longer-term earnings story.
The firm expects membership to accelerate as Walmart focuses on value, delivery speeds, and gas savings through Walmart+ and Sam’s Club. Marketplace expansion is also helping build a flywheel around advertising and seller adoption of fulfillment services, according to the note.
Those businesses matter to Walmart’s valuation because they can support earnings growth even if the broader consumer backdrop becomes more difficult. Bank of America left its fiscal 2027 and fiscal 2028 earnings estimates unchanged at $2.90 and $3.20 per share, respectively.
That premium reflects Bank of America’s view that Walmart can continue posting positive U.S. comparable sales, drive traffic growth, and use technology to drive share gains and operating income growth at a pace nearly twice sales growth.
The firm listed several risks to its view, including slowing food inflation or deflation, Walmart’s ability to keep gaining share given its size, a weaker global retail environment, and competitive pressure at Sam’s Club or Walmart International.
For now, Bank of America is choosing to defend the stock after the pullback. The target came down, but the broader message stayed bullish: Walmart remains one of the better-positioned retailers in a tougher consumer environment.
Related: Morgan Stanley resets Walmart forecast on high inflation
