Walmart (WMT) is expected to generate stable and predictable earnings despite broader concerns around tariffs and economic pressures because its heavy mix of consumables and alternative, high-margin revenue streams make the company more resilient, UBS Securities said in a note Friday.
The company's Q1 results are expected to highlight its comparable sales momentum, though earnings per share may be modestly pressured due to a $200 million casualty claim expense, according to the note.
UBS said that only 10% to 15% of Walmart's US business is exposed to Chinese imports while about two-thirds of products, particularly in grocery, are sourced in the US.
The company is renegotiating with suppliers and will likely reengineer products, shift sourcing to other countries, and raise prices where demand is less price-sensitive to ease the impact of tariffs, the firm added.
UBS has a buy rating on Walmart's stock with a $110 price target.
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