UBS analyst sees steady execution at Walmart based on Q4 results

Investing.com

Sat, February 21, 2026 at 3:32 PM GMT+9 2 min read

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**Investing.com – ** Following a stellar Q4 earnings report, UBS analyst Michael Lasser told Yahoo Finance that there are still catalysts on the horizon for Walmart (NASDAQ: WMT). The catalysts include an upward earnings estimate revision cycle, expected tax refunds from the government, and a significant change in its business.

Speaking after the earnings release, Michael broke down why he thinks that the retail giant remains “straight down the middle” despite a conservative forecast for the year ahead. While the market often reacts to forward-looking guidance, Lasser suggests that the real story is Walmart’s “steady execution” and its transformation into a higher-margin platform.

The “Walmart Being Walmart” Strategy

Responding to the company’s conservative FY27 guidance, Lasser noted that this is essentially “Walmart being Walmart.” The retailer has a long-standing habit of under-promising in its earnings forecasts to ensure they can over-deliver, a strategy that Lasser believes is working at a “very high level.”

The core revenue engine remains stable: Walmart continues to dominate in groceries and general merchandise. However, the real growth is coming from the recently added “layers” on top:

High-margin streams: Automation and new business segments (like advertising and membership) are beginning to shift the profit mix.

Stable consumer trends: Lasser pointed out that U.S. consumer health remains stable, with an expected boost in the coming weeks as tax refunds begin to hit household bank accounts.

Attracting higher-income customers

A standout metric from the Q4 results was the 4.6% rise in U.S. same-store sales. According to Lasser, this growth isn’t just coming from their traditional base. Walmart is increasingly capturing market share from higher-income households who are prioritizing the “convenience and speed” of online delivery over lower-priced alternatives.

Global eCommerce, which surged 27% in the quarter, has now scaled to roughly $100 billion in GMV (gross merchandise volume). For Lasser, this digital scale is the key to maintaining valuation as the company navigates external factors like a shifting labor market.

Valuation: can Walmart shares still go higher?

Despite the stock’s recent moves, UBS remains bullish on the long-term trajectory. Lasser argues that as the company continues to execute its strategy of selling high-volume groceries while layering on high-margin services, the shares will likely continue to “respond favorably.”

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“The model is working,” Lasser told Yahoo Finance, suggesting that the current valuation reflects a company operating at peak efficiency.

For investors, the takeaway from the Lasser/UBS analysis is clear: don’t let the cautious guidance overshadow the operational strength. Walmart is successfully transitioning from a discount retailer into a diversified tech and advertising platform.

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