Expert picks a side ahead of retail earnings

Walmart Inc (NYSE: WMT) is a better pick for an economic downturn that’s coming than its peer Target Corporation (NYSE: TGT), says Steph Wissink. She’s a Managing Director at Jefferies.

Wissink defends her pick on CNBC’s ‘Power Lunch’

Wissink prefers Walmart that lowered its guidance last month primarily because it’s focused more on “staples” rather than “discretionary” items. Making her case this afternoon on CNBC’s “Power Lunch”, she said:

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On the Walmart retail side, which competes more directly with Target, the one thing that we favour is the business mix. It’s 65% necessity and grocery that tends to be a winner in recessions.

Walmart is set to report its Q3 results on August 16^th. Consensus is for the big box retailer to earn $1.60 a share (down 10% YoY) on $149.96 billion in revenue (up 6.4% YoY).

The stock is down roughly 17% versus the start of the year 2022.  

Walmart reveals a partnership with Paramount Global

Also on Monday, the retail behemoth said members of its loyalty programme (Walmart+) will now have access to Paramount+ (streaming service) – a partnership that reiterates its commitment to rival Amazon.com Inc.

Wissink also likes Walmart as it’s expanding into fintech, healthcare, and other services that make it more “multi-dimensional” in terms of profitability. She also noted:

We do see them taking incremental price but still widening those price gaps. So, in a position to take share in the big categories that matter most to consumers every week they’re going to the store.

Wall Street recommends that you buy Walmart stock that’s trading at a PE multiple of 28.49.