J.P. Morgan analyst Christopher Horvers reiterated a Neutral rating on the shares of Walmart Inc (NYSE:WMT). 

The retailer reported that in the first quarter of 2025, the adjusted EPS was $0.60, beating the consensus estimate of $0.52. Sales were $161.51 billion, up 6.0% year over year.

Overall, WMT posted solid results characterized by a 15% EPS beat ($0.60 vs. $0.52 consensus)) driven by strong margin performance, and good U.S. comps, said the analyst.

More specifically, U.S. comps of 3.8% came in 20 bps above the street's view of +3.6% and a titch below the analyst's previewed buyside expectations.

Gross margin increased about 40 bps YOY to 24.1%, above the analyst's 23.7% and the street's 23.9%.

For 2Q24, WMT expects net sales growth of 3.5% – 4.5% (vs. street +3.7%), operating income growth of +3% – 4.5% (vs. street +3.2%), and EPS of $0.62-0.65.

For FY24, WMT now expects to reach the high end or slightly above its guide of consolidated sales +3% – 4%, operating income +4% – 6%, and EPS $2.23 – 2.37, noted the analyst.

In terms of today's reaction, while U.S. comps a bit below 4.0% was a risk factor the analyst identified, the fact that WMT beat EPS so strongly and actually took the FY up is likely to drive a positive reaction in the stock, the analyst opined.

However, the analyst warned that the trend in comps will be a focus as this tends to be the primary driver of retail valuation around a stock's range. 

Price Action: WMT shares are trading higher by 6.38% at $63.65 at the last check Thursday.

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