Key Takeaways

• Walmart is due to report earnings Tuesday morning, with analysts expecting sales to continue growing as Walmart's customer base grows.

• The retailer said its market share grew across income levels in recent quarters, which analysts said should continue.

• Walmart's growing digital advertising business is also a focus, as Bank of America analysts said it is boosting Walmart's overall profit margins.

Walmart (WMT) is slated to report earnings before the market opens Tuesday for the third quarter of fiscal 2025, with analysts expecting improving sales as Walmart continues to expand its customer base across income levels.

Analysts are bullish on the retail giant's stock, with 22 of the 23 analysts covering Walmart tracked by Visible Alpha rating the stock as a "buy" and just one analyst calling it a "hold." However, some analysts may be waiting for the results of Walmart's latest quarter to adjust their outlook on the stock's future: The average target price of $86.43 is roughly 3% above Friday's close.

Walmart is projected to report quartelry revenue at $167.73 billion, up from $160.8 billion at the same time last year. The retailer is expected to post net income of $4.24 billion, up from $453 million last year, when its profits were hit by negative changes to the value of some of its investments.

Walmart's adjusted profits are expected to rise to $4.26 billion from $4.13 billion in the second quarter.

Gains Across Income Levels, Advertising Revenue in Focus

Bank of America analysts wrote recently that they see Walmart's market share gains across income levels continuing in the latest quarter.

Melius Research analysts said that's because of the retailer's "concerted effort" in recent years to prepare for a "pressured macroeconomic environment" in which it could win customers from dollar-store rivals with smaller packaging and lower prices, while also investing in convenience features like faster delivery for Walmart+ members.

The Bank of America analysts also said that advertising revenue is a key part of Walmart's business, as its high profit margins can help improve the company's overall profits.

Walmart shares are up about 60% this year.