Walmart's (WMT) fundamental drivers of long-term profit growth remain intact amid the "near-term noise," Morgan Stanley said in a note emailed Friday.

The company is solidifying its status as an "eCommerce disruptor" with strong underlying momentum in its alternative profit flywheel, Morgan Stanley analysts said. The company continues to make use of its advantages in price gaps, scale, supply chain, and convenience to gain market share, they stated.

Walmart continues to manage its business with a long-term focus, and the analysts said the company is "taking the right approach to long-term value creation by prioritizing market share gains over short-term profitability," even as tariffs impact US retailers. The company's fiscal Q2 was weighed by its strategic spending to protect customers from the effects of tariffs and inflation, they said.

The analysts said they see Walmart's earnings momentum in fiscal 2024 to 2025 to continue through fiscal 2027 and 2028 as the flywheel of its eCommerce, Membership, and Advertising segments drive financial performance.

Morgan Stanley maintained the company's stock rating at overweight with a price target of $115.

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