Walmart (WMT) is positioned well for "continued outperformance" due to its rising underlying momentum and lifting of its fiscal 2026 guidance, UBS said in a Thursday note.

The retail supermarket chain will face easy comparisons in 2026, especially in H1, when it will lap a $730 million charge, and it will not come across many other profit headwinds as well, which it is facing this year due to its Vizio takeover and leap year, analysts led by Michael Lasser wrote.

The company's stock performance is anticipated to rise when tariffs will impact buyers' budgets "more meaningfully" in the coming months, as tariffs are resulting in faster retail price increases than expected, according to the note.

Additionally, Walmart has increased capacity in its P&L to face tariffs better than the other retailers and it is capitalizing on this opportunity to keep its prices low, the analysts mentioned.

"At the very least, it's not raising prices to the same extent as the broader market," the note added.

UBS maintained Walmart's rating at buy with a $110 price target.

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