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Walmart’s (WMT) stock and strategic outlook remain steady despite President Trump’s directive for the retailer to “eat the tariffs,” following Walmart’s indication that it may raise prices in response to rising import costs.

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Currently, tariffs include a 30% levy on Chinese goods and a 10% tariff on imports from most other countries—a significant concern for Walmart, given that around 60% of its imports come from China. With operating margins typically in the narrow 4% to 5% range, the company faces difficult trade-offs between absorbing costs or passing them on to consumers, challenging its low-price core value proposition.

Nevertheless, Walmart’s massive scale, strong brand, and strategic agility position it better than most in navigating these pressures, leaving me tentatively optimistic about the stock’s resilience in the face of ongoing trade uncertainty.

Initial Impact and Trump’s Stance

Walmart’s latest quarterly results were solid, with revenue reaching $165.6 billion—a 2.5% year-over-year increase—and operating margins holding steady at 4.3%. However, the recent wave of global tariffs has injected uncertainty into the outlook, prompting the company to withdraw its second-quarter operating margin guidance. CFO John David Rainey signaled that price hikes are inevitable.

While Walmart has reduced its reliance on Chinese imports from 80% in 2018 to around 60% today, China still supplies approximately 15% of its total merchandise—particularly in categories like electronics and toys. Starting in May, and escalating in June, Walmart will begin raising prices across most product lines, a move that drew sharp criticism from President Trump.

Meanwhile, Chinese authorities are pushing back against suppliers asked to absorb tariff costs, leaving U.S. retailers like Walmart caught in the middle. Although recent negotiations between the U.S. and China led to a partial rollback of tariffs from previous highs, the current levels still present a significant cost burden, one that even a giant like Walmart is struggling to absorb.

All Retailers Must Grapple with Tariffs

Walmart isn’t alone in navigating the challenges posed by tariffs—retailers like Home Depot (HD) and Target (TGT) are also being forced to adapt. Home Depot has chosen a different path, opting to discontinue certain product lines and diversify its supply chain rather than raise prices. Target, on the other hand, is increasing prices on select items after lowering its sales forecast.

Walmart, however, is pursuing a strategic approach aimed at maintaining its price advantage. By selectively absorbing some tariff-related costs, the company aims to preserve its competitive edge and potentially grow market share as rivals face similar pressures. With its scale, negotiating leverage, and deep financial reserves, Walmart is well-positioned to weather the current tariff environment—and may emerge even stronger in the long term.

Is Walmart a Buy, Sell, or Hold?

On Wall Street, WMT sports a Strong Buy consensus rating based on 28 Buy, two Hold, and zero Sell ratings in the past three months. Its average price target of $109.31 implies a 13.24% upside potential over the next twelve months.

KeyBanc analyst Bradley Thomas maintains an Overweight rating on Walmart (WMT) with a $105 price target . He cites the company’s strong first-quarter results amid a “volatile backdrop and tariff noise.” He highlights Walmart’s continued market share gains in grocery and its solid positioning to navigate broader macroeconomic challenges.

Similarly, Wells Fargo analyst Edward Kelly has a Buy rating and a $108 price target on WMT. He praised the retailer’s resilience and strategic agility, emphasizing its preparedness to manage the current tariff landscape through disciplined pricing, inventory control, and a clear focus on long-term financial objectives.

As Walmart Sidesteps Tariff Turmoil, Consumers May Pay the Price

In summary, Wall Street remains broadly confident in Walmart’s ability to navigate the complex and uncertain tariff landscape under President Trump. While the burden of these tariffs will ultimately fall on American consumers, Walmart’s scale, global supply chain expertise, and political leverage position it better than most to absorb the impact. Although its reliance on Chinese imports makes it somewhat more exposed, the entire retail sector is feeling the strain.

Walmart’s response carries broader implications—not just for retail, but for the U.S. economy as a whole. If a company of Walmart’s size and sophistication struggles to weather these challenges, it raises serious questions about the resilience of smaller players. That said, investors can take comfort in Walmart’s proven adaptability and strategic focus, even as some near-term volatility should be expected. For me, Walmart remains a cornerstone holding, well-equipped to emerge from this period even stronger.

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