Walmart is not as exposed to tariffs as you think

Following the company’s analyst meeting, Roth analyst Bill Kirk remains bullish on Walmart (Walmart Stock Quote, Chart, News, Analysts, Financials NYSE:WMT).

“Walmart hosted an Analyst Meeting on April 8/9, with Supply Chain Facility Tours, an Executive Dinner, a webcast Business Meeting, and Club/Store Tours,” the analyst wrote. “We were struck by management’s confidence in the face of heightened volatility/uncertainty. The capabilities and opportunities showcased at the event make Walmart special and stand in contrast to competitors that seem years behind. We continue to expect strong share gains, P&L leverage through outsized growth of the highest margin categories, and strong shareholder returns.”

In a research update to clients April 10, Kirk maintained his “Buy” rating and price target of $108.00 on WMT.

The analyst thinks the company will post Non-GAAP EPS of $2.70 on revenue of $190.1-billion in fiscal 2026.

For many, Walmart would seem to be the very definition of tariff exposure, but Kirk notes that that is not really the case.

“Walmart reiterated that two-thirds of what is sold is made, grown, or assembled in the U.S. (although may be subject to input pressures),” he added. “The wide range of 1Q operating income leaves Walmart the room to invest in price (i.e., partially eat tariffs), a chilling thought for competitors.”

Kirk broke down his valuation on WMT.

“Our $108 price target is DCF-derived and implies ~19x EV/FY26e EBITDA and ~40x FY26e P/E. Our DCF assumes: 1) ~10% annual EBIT growth; 2) 3% terminal growth; 3) ~6% WACC; and 4) normalized CAPEX of $20bn/year,” he said. “Impediments to our price target include: 1) cost headwinds outweigh Walmart’s ability to raise prices; 2) manufacturers, in an effort to save money, reduce advertising spending on Walmart platforms; and 3) labor availability remains too tight.”