Walmart (WMT) is expected to see a potential upside in fiscal Q3 US comparable sales and continued gross margin expansion, BofA Securities said in a note emailed Tuesday.
BofA estimates a 3.5% US comparable sales growth for the quarter, below the consensus estimates of 3.6%, but the investment firm said it still sees potential for upside as Bloomberg Second Measure credit and debit card data shows an acceleration in observed sales for Walmart.
BofA also forecasts fiscal Q3 adjusted earnings of $0.52 per share on revenue of $167.11 billion, versus consensus estimates of $0.53 and $167.62 billion, respectively.
The retail giant is set to release its fiscal Q3 results on Nov. 19.
Walmart is poised for continued gross margin expansion, driven by increasing contributions from higher-margin profit streams such as digital advertising, fulfillment services, and third-party marketplace, BofA said.
The company also continues to gain market share across incomes and product categories given its value offering and digital convenience. Furthermore, Walmart's investments in supply chain, automation, digital technologies, and third-party marketplace offerings could further support sales and gross margin upside, BofA added.
BofA reiterated its buy rating on Walmart, with a price target of $95.
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