03:20 PM EDT, 08/04/2025 (MT Newswires) -- Walmart ( WMT ) is expected to report fiscal second-quarter results above Wall Street's estimates amid tariff-led price increases, while rival Target's ( TGT ) earnings are likely to fall short, RBC Capital Markets said Monday.

For Walmart ( WMT ), the brokerage projects second-quarter adjusted earnings at $0.80 a share and constant-currency net sales growth of 4.9%, above the consensus estimates of $0.73 and 4.8%, respectively. The retail giant is scheduled to report results Aug. 21.

"For (Walmart ( WMT )), transaction data (plus) our proprietary scanner data state-weighted analysis suggest a modest top-line beat," RBC analyst Steven Shemesh said in a Monday note to clients.

In May, the company logged an unexpected annual increase in its first-quarter earnings and maintained its full-year outlook, though its chief executive warned that the company will have to increase prices due to the impact of tariffs.

If Walmart ( WMT ) delivers second-quarter results in line with RBC's model, that should give the company the "comfort" to increase its full-year constant-currency net sales growth outlook to between 3.5% and 4.5% from its prior guidance range of up 3% to 4%, the brokerage said. "We have less conviction on profit guidance being raised as (Walmart's ( WMT )) accounting treatment could result in a (second-half) headwind if markdowns are required."

For Target ( TGT ), RBC now expects second-quarter adjusted EPS of $1.91, which it said was ahead of its prior outlook of $1.89, but below the Street's $2.01 view. Comparable sales are now seen dropping 2.6% versus RBC's previous expectations of a 3.6% fall and the Street's model for a 3.3% drop. Target ( TGT ) is set to release its quarterly results Aug. 20.

The updated outlook is based on "transaction data (plus) peer read through pointing to more favorable weather (and) improving consumer sentiment," Shemesh said. "While we expect (second-quarter) results to be fine, we expect (management) to maintain a cautious tone as tariff-led inflation begins to hit the market in (the third quarter)," the analyst said.

In May, Target ( TGT ) logged first-quarter results that fell more than the Street's estimates, while the retailer slashed its full-year outlook, citing the impact of tariffs and uncertain consumer spending.

RBC raised its price targets for the Walmart ( WMT ) and Target ( TGT ) stocks to $106 and $104, respectively, from $103 each, while maintaining its outperform rating for both. Walmart ( WMT ) shares were up 1% in Monday late-afternoon trade, while Target ( TGT ) rose 0.3%.

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