Prediction: Walmart Stock Could Soar if It Can Continue to Do This

Core Viewpoint - Walmart's strong Q1 results indicate potential for continued stock growth, driven by attracting higher-income consumers and maintaining its competitive pricing strategy [1][5]. Financial Performance - Walmart's Q1 revenue increased by 6% to $161.5 billion, with adjusted EPS rising by 22% to $0.60 [2]. - U.S. store sales grew nearly 5% to $108.7 billion, with same-store sales up 3.8%, primarily due to increased transactions [2]. - International sales rose 12% to $29.8 billion, with a nearly 11% increase in constant currencies, driven by strong performances in Mexico, China, and India [2]. Sales Channels - Sam's Club U.S. sales increased nearly 5% to $21.4 billion, with same-store sales (excluding fuel) rising 4.4% [3]. - E-commerce sales for Walmart grew by 22%, while Sam's Club's e-commerce sales increased by 18% [2][3]. Future Outlook - Walmart forecasts Q2 sales growth between 3% to 4.5% and expects full-year sales to be at the high end of its previous guidance of 3% to 4% [3]. - The company anticipates full-year adjusted EPS to be at the high end or slightly above its prior outlook of $2.23 to $2.37 [3]. Consumer Engagement Strategy - Walmart is successfully attracting higher-income consumers by enhancing convenience through services like pick-up and delivery, and by offering higher-quality products [5][6]. - The Walmart+ membership program is growing rapidly, contributing to the attraction of upper-income customers [6]. Investment Consideration - The stock is currently trading at a forward P/E of approximately 26.5, above its historical average of around 20 [7]. - There is potential for the stock to grow further if Walmart continues to attract higher-end consumers and exceeds EPS expectations [7][8].