03:56 PM EDT, 05/09/2025 (MT Newswires) -- Walmart's ( WMT ) potential to deliver "durable and predictable" earnings amid tariffs-induced macro uncertainty is likely to result in outperformance for the retail giant's stock, UBS Securities said Friday.

Last month, the company reiterated its sales and operating income outlooks for fiscal 2026, shrugging off concerns that tariffs-related uncertainty could force it to pull its guidance.

In April, Trump announced reciprocal tariffs, but later paused certain levies for non-retaliating countries. On Thursday, he announced a trade deal with the UK and said pacts with other countries would follow. Trump on Friday floated the idea of lowering tariffs on China to 80% from 145% ahead of trade talks between US and Chinese officials over the weekend.

UBS expects Walmart ( WMT ) to reiterate its outlook when it reports its fiscal first-quarter results May 15. The brokerage projects adjusted earnings at $0.55 a share for the quarter on revenue of $165.13 billion. Wall Street is looking for $0.57 and $165.56 billion, respectively, UBS said in a Friday note to clients.

"As it relates to the (first-quarter) performance and outlook, we think (Walmart ( WMT )) maintained its healthy comp momentum, with its comp trends improving as the quarter progressed," UBS analysts, including Michael Lasser, said. "We think (Walmart's ( WMT )) more favorable positioning relative to the rest of retail will probably become even more evident as the year unfolds, when the operating environment could become much more challenging."

Although the company is expected to increase prices to mitigate some of the expected impact of tariffs, it will likely use this as "the last resort," Lasser wrote. Walmart ( WMT ) is renegotiating with its suppliers to "absorb" some of the tariff cost, according to the note.

Walmart ( WMT ) is likely to expand its market share as the disruption caused by tariffs could reshape the retail landscape over time and prompt consumers to turn to companies that offer low prices and better in-stocks, Lasser said. "As such, we think (Walmart ( WMT )) is well positioned to outperform both near and long term," the analyst said.

UBS has a buy rating and $110 price target on the retailer's stock.

Price: 96.76, Change: -0.43, Percent Change: -0.45