Analysts expect tariff refunds and lower fuel costs to offset the discounts, leaving Walmart’s profit guidance intact.
- Walmart is lowering prices on groceries and seasonal items at Walmart and Sam’s Club.
- BofA analyst Christopher Nardone said Walmart’s price cuts will be funded through existing guidance and tariff refund.
- Mizuho reiterated its Outperform rating and $137 price target on Walmart.
Walmart Inc. (WMT) stock is heading for a fourth straight week of loss even as Bank of America analysts support the retail giant’s latest price cuts, saying the move fits within its existing financial plan and does not create additional risks for margins, even as competition in the grocery market remains intense.
BofA Sees No Risk To Walmart’s Guidance From Lower Prices
BofA analyst Christopher Nardone said the price reductions will be financed through spending already accounted for in Walmart’s guidance issued earlier this year, along with tariff-related refunds that have recently begun flowing back to the company.
He added that these resources allow Walmart to pass savings to shoppers without changing the company’s previously announced expectations.
The analyst said that the move highlights the retailer’s willingness to compete aggressively, particularly in grocery, where pricing remains one of the biggest factors influencing consumer purchasing decisions.
Walmart stock edged 0.5% higher in Wednesday’s premarket.
Trump Highlights Walmart Discounts
Walmart is cutting prices on selected grocery and seasonal items after President Donald Trump announced the discounts as part of celebrations for the United States’ 250th birthday.
Trump said Walmart agreed to lower prices on several products, including reducing the price of ground beef by nearly 15%. Walmart confirmed it will offer discounts at both Walmart and Sam’s Club on items such as beef, fresh produce, drinks, grills, toys, pools, and summer clothing. Sam’s Club is also cutting prices on more than 250 seasonal products.
The move comes as Americans continue to struggle with high prices. Inflation rose to 4.2% in May, well above the Federal Reserve’s 2% target, and interest rates remain unchanged. With the cost of living still a major concern, lower grocery prices could be important for shoppers and carry political significance ahead of the congressional midterm elections.
Mizuho Sees Upside As Price Cuts Stay Within Walmart’s Outlook
Walmart also retained support from Mizuho, which maintained its ‘Outperform’ rating and kept its $137 price target, implying a 24% upside to the stock’s last close, according to an investing.com report.
Analyst David Bellinger echoed BofA’s thesis, saying the latest discounts were already factored into Walmart’s fiscal 2026 financial outlook. According to Bellinger, Walmart has multiple sources of financial support to offset lower prices.
The company expects tariff refunds exceeding $2 billion, with a portion already received. In addition, lower diesel prices have eased a major cost pressure after Walmart had previously built roughly $925 million of additional fuel expenses into its annual outlook. Mizuho now estimates the full-year fuel impact will be closer to $700 million to $800 million.
Also, ‘Mad Money’ host Jim Cramer said Walmart’s recent 17.5% pullback since its May record high presents an attractive buying opportunity, arguing that the company’s biggest challenges are easing.
WMT Retail View
On Stocktwits, retail sentiment around the stock turned to ‘neutral’ from ‘bullish’ territory the previous day. The stock saw a 600% surge in message volume over the last week with 0.1% rise in watchers.
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