Walmart's (WMT) upcoming Q2 earnings will likely show that the company's underlying momentum remains "strong," UBS said in a Tuesday note.

UBS said it believes Walmart can manage the tariff dynamic and will likely take a conservative approach in regard to its H2 inventory planning.

UBS said it estimates Walmart could either maintain its full-year earnings per share outlook or raise it modestly, which would largely depend on magnitude of the accounting benefit from tariff-related price increases in the quarter.

UBS expects Walmart to report total revenue of about $176.6 billion, along with comparable store sales growth (ex-fuel) of 4.5% at Walmart US and 6.5% at Sam's Club for Q2.

Walmart is slated to release its Q2 results on Aug. 21.

The firm rates Walmart as buy with a $110 price target.

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