Key points:
- Walmart positioned to top estimates says analyst
- Walmart shares are up 12% in the last 3 months
- Analyst says he would take advantage of any dips in the stock
Walmart (NYSE: WMT) is positioned to top consensus estimates, according to a note from Oppenheimer analyst Rupesh Parikh on Monday.
Parikh, previewing the company ahead of its quarterly results, told investors that so far this year, Walmart's shares are meaningfully outperforming, declining 3% compared to a 22% decline in the S&P 500.
The company's shares are up over 12% in the last three months, trading just below the $141 mark.
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The analyst said that he believes the company is positioned to top consensus estimates ahead of Walmart's results, set to be released on November 15. In its previous release, Walmart topped earnings and revenue expectations.
Recent data points indicate continued momentum in the grocery category helping to offset expected headwinds within Walmart's general merchandise offerings, stated Parikh, who has an Outperform rating and a $155 price target on Walmart shares.
However, he added that amidst significant challenges in discretionary categories, including CE, Apparel, and Toys, he expects only a reiteration of full-year 2022 guidance.
In addition, the analyst believes the defensive attributes of Walmart's business model, grocery share gains, growing contributions from alternative revenue streams, and easy comparisons reinforce an outperformance case for the company from here.
While Walmart shares have generally struggled on recent prints, Parikh stated that he would take advantage of any dips.
Elsewhere, in October, Jefferies analyst Corey Tarlowe raised the firm's price target on Walmart to $165 from $161, maintaining a Buy rating on the shares. Tarlowe told investors in a research note that Walmart is well-positioned in the present environment.