Bank of America turned more constructive on Walmart ( NYSE: WMT ) on Wednesday after taking in the retail giant's earnings report.
The firm noted that Walmart is gaining market share in a tough consumer environment and sees support for continued upside as it makes more share gains gains in grocery off its strong value offering that is appealing to a widening range of consumers in a challenging economic backdrop.
Analyst Robert Ohmes also pointed out that Walmart ( WMT ) has less exposure to discretionary spending than some peers like Target. On a historic basis, he reminded that Walmart has outperformed the market during the last five recessions.
"We believe WMT's omni-channel transformation in the US will continue to gain momentum and support more sustainable and predictable positive same-store sales and traffic at US Supercenters and US ecommerce and GMV growth that should support P/E multiple expansion."
BofA reiterated a Buy rating on Walmart ( WMT ) and raised its price objective to $165.
Shares of Walmart ( WMT ) fell 0.86% in premarket trading to $146.17 after a 6.54% pop on Tuesday. A holiday sales warning from Target is weighing heavy on the retail sector in general.
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Walmart is expected by BofA to power right through any U.S. recession