11:24 AM EDT, 08/15/2024 (MT Newswires) -- Walmart's ( WMT ) fiscal Q2 results reaffirmed the business is growing stronger amid a "tough backdrop," Morgan Stanley said in a Thursday note.

The company reported fiscal Q2 earnings of $0.56 per diluted share, down from $0.97 a year earlier, while its revenue rose to $169.34 billion from $161.63 billion a year earlier. Analysts polled by Capital IQ expected $0.64 EPS on revenue of $167.38 billion.

Walmart ( WMT ) said it expects higher fiscal 2025 adjusted earnings of $2.35 to $2.43 per diluted share, compared with the previous guidance of $2.23 to $2.37.

Morgan Stanley said the "most important elements" of Walmart's ( WMT ) story delivered in Q2, noting that its comparable sales growth demonstrated market share leadership and EBIT growth outpaced that of sales due to core and alternative profits.

According to the investment firm, the company's US comparable sales and EBIT growth in Q2 came amid "an increasingly choppy" macro environment where several competitors are missing Street views and lowering their outlooks.

However, Morgan Stanley noted that Walmart's ( WMT ) increased fiscal 2025 guidance only reflects outperformance in the first half, while its second-half outlook remains unchanged with implied Q3 and Q4 EPS currently below consensus.

Morgan Stanley has an overweight rating and a $75 price target on Walmart ( WMT ).

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