Walmart’s earnings are due out on Thursday, May 18, before the US open. Walmart is expected to report strong first-quarter sales, surpassing expectations, driven by robust food sales and increased membership at its Sam’s Club division, according to a report by Bloomberg Intelligence. Citi analysts also suggest there is potential for a slight increase in the company’s annual guidance. The market has shown optimism about Walmart’s long-term prospects due to its market-share gains and improving profitability. Walmart has received 37 “buy” and 11 “hold” ratings on its shares after it spoke about investments in automation and advertising during its April analyst event.

Seasonally, Walmart has an interesting seasonal pattern with a period of weakness over the summer followed by seasonal strength into the year-end. Does this mean any dips lower are great opportunities to buy? Walmart, as a consumer staple stock, should typically be well-placed to weather a recession.

Major Trade Risks: The biggest risk here is if the US economy has a very hard landing impacting stocks.

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