Trump’s trade tariffs officially kicked in on Wednesday and the major hit countries are Canada and China. However, China imposed reciprocal tariffs on some goods entering their country in a tit-for-tat policy. The markets reacted strongly as the trade tariffs went live as Dow Jones dipped 670 points. Nasdaq and the S&P 500 index fell 65 points and 71 points, respectively. Amid the downturn, retailer Walmart (WMT) stock could gain the most out of the trade war.
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Walmart (WMT) Stock Prospects
The prices for imported goods at Walmart could rise this week as Trump’s trade tariffs hit the market. However, the wholesaler and retailer maintain a large and sophisticated supply chain that could help mitigate the pricing impact. The supermarket giant can absorb the price increase and pass on the new cost to consumers without losing market share. This could make sales drive up and eventually be a good bet to WMT stock.
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As consumers prioritize value and lower costs, Walmart’s stock stands to benefit from economic uncertainty. In addition, the wholesaler boasts solid financials, with revenue of $180.55 billion in Q4. This marked an increase of 4% year over year, indicating it’s an unstoppable force in the supermarket sector.
Apart from retail sales, Walmart has also penetrated the e-commerce sector marking a significant shift as 18% of its revenue now comes from online sales. The global e-commerce sector has surged over 16% in a year making Walmart gain in both retail and the online sector. The development adds more value to WMT stock and taking an entry position as tariffs kick in could be beneficial.
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Walmart stock is trading at the $95 level and is down nearly 8% in the last 30 days. If sales significantly improve, WMT could climb above the $100 mark and surge further in the charts.
