BofA Sticks With Walmart Buy Ahead of Aug. 20 Earnings
Walmart reports on Aug. 20, and Bank of America says the U.S. same-store sales headline is the least interesting number in the release. Here is what the reiterated Buy rating actually rests on.
Bank of America reiterated a Buy rating on Walmart ahead of the retailer's Aug. 20 earnings report, arguing that investors fixating on U.S. comparable store sales are watching the wrong part of the business; Walmart last closed at 115.27, down 0.39%.
Walmart (WMT) reports quarterly results on Aug. 20, and the ritual is well established: the number that moves the stock in the first ten minutes is U.S. comparable store sales, the year-over-year change in revenue from stores and digital channels that have been open long enough to be measured against themselves. Bank of America (BAC) is telling clients that number is no longer the point. The firm reiterated a Buy rating on Walmart heading into the print, arguing that investors who read the comp line and stop there are looking at the wrong part of the company.
That is a pointed thing to say about the largest retailer in the country, because comps have historically been the entire story. A grocery-led big-box chain either takes share from rivals or it does not, and the comp tells you which. The case Bank of America is making, as reported by TheStreet, is that the profit engine has migrated to lines that sit further down the release — advertising and the other high-margin income streams Walmart has built on top of its retail footprint — and that those lines, not the comp, will decide where earnings go from here.
Where the stock sits going into the print
Walmart last closed at 115.27, down 0.39% on the day, with a session range of 114.64 to 116.45 against a prior close of 115.72, as of the last trade on Fri, 14 Aug 2026 at 20:00 GMT. That is a stock drifting, not one being repriced — a slightly softer tape than the broad market delivered on the same day. The S&P 500, via the SPY exchange-traded fund, closed at $776.34, off 0.20%; the Dow 30 proxy DIA finished at $536.80, down 0.21%; and the Nasdaq 100 proxy QQQ closed at $731.07, lower by 0.14%.
Bank of America itself closed at 64.49, up 0.62%, its best level of the session at 64.55 and a high-side close against a prior 64.09.
The setup matters because of what it implies about positioning. Walmart is going into a scheduled catalyst — six days after that last close — with no obvious pre-earnings run and no visible discount. Whatever the market thinks of the quarter, it is not front-running it aggressively. That leaves the reaction function entirely dependent on the release, and it is the reaction function Bank of America is trying to reframe.
Why the comp line has become a poor proxy for profit
Comparable sales measure volume through the same square footage. They say nothing about the mix of what was sold or the margin earned on it. A retailer can post a respectable comp built on low-margin groceries and consumables while its profit dollars go sideways, and it can post a modest comp while margins expand because a growing slice of revenue arrives with almost no cost of goods attached.
That second scenario is the one bulls on Walmart have been describing for several quarters. Retail media — selling advertising placements against the traffic a retailer already owns, on its site, in its app and increasingly in its aisles — carries margins that look nothing like grocery. Neither does fulfillment sold to third-party sellers, nor membership income. When these lines grow faster than the store base, reported operating profit can outrun the sales headline. When an investor screens only the comp, that divergence is invisible.
The practical implication for anyone watching the Aug. 20 tape: a comp that lands a touch below consensus is not automatically bad news, and a comp that beats is not automatically a clean quarter. The information sits in the gross margin line, the segment operating income detail, and whatever management discloses about advertising growth rates.
What a reiterated Buy does and does not tell you
Reiterations are the quietest form of analyst communication. Nothing changed in the model; the analyst is restating conviction ahead of an event that could test it. That is different from an upgrade, which signals a change of mind, and different again from a raised price target, which signals a change of arithmetic. Bank of America reiterated Buy — a statement of continuity, delivered at a moment when the firm evidently expects the market to misread the release.
Nothing changed in the model; the analyst is restating conviction ahead of an event that could test it.
It is worth being clear about what has not been disclosed here. The reiteration is the rating; investors should not read into it a specific implied upside without seeing the target, and should treat any single sell-side view as one input among many. Ratings ahead of earnings are opinions about probability, not forecasts of the print.
The reporting lines to read first on Aug. 20
For readers who will scan the release themselves, the sequence Bank of America's framing suggests is roughly the inverse of the usual habit:
- Gross margin and operating income by segment — the test of whether mix, not volume, is doing the work.
- Advertising and other high-margin revenue disclosure — the growth rate here is the crux of the bull case.
- E-commerce contribution and its profitability trend — digital volume that loses money is a different business from digital volume that does not.
- Membership and services income — recurring, and largely insulated from grocery price deflation.
- U.S. comparable sales — still relevant as a share-gain signal, just not the whole verdict.
The broader shift this argument reflects
The Walmart debate is a specific instance of something happening across large-cap retail: the most valuable parts of these companies increasingly resemble media and logistics businesses attached to a store network, and the disclosure conventions have not caught up. Analysts are having to build the interesting numbers out of fragments in the release and management commentary, while the market still trades the one line it has traded for decades.
That gap is where a reiterated Buy ahead of a catalyst earns or loses its keep. If Walmart's Aug. 20 report shows margin expansion driven by high-margin income while the comp is merely fine, Bank of America's framing will look prescient and the initial share reaction may prove a poor guide. If margins compress and the comp carries the quarter, the traditional read still works. Either way, the interesting number is unlikely to be the first one that appears on the screen.
Key facts
- Earnings date: Walmart reports Aug. 20
- WMT last close: 115.27, -0.39% (as of Fri, 14 Aug 2026 20:00 GMT)
- Analyst action: Bank of America reiterated a Buy rating
- BAC last close: 64.49, +0.62% (as of Fri, 14 Aug 2026 20:00 GMT)
Frequently asked questions
When does Walmart report earnings?
Walmart is scheduled to report quarterly results on Aug. 20. The release typically draws the most attention for U.S. comparable store sales, but Bank of America has argued that investors focusing only on that figure are watching the wrong part of the business heading into this particular report.
What did Bank of America say about Walmart?
Bank of America reiterated a Buy rating on Walmart ahead of the Aug. 20 earnings report. The firm's argument is that the U.S. comparable store sales headline, which usually dominates the market reaction, understates what is happening in Walmart's higher-margin income streams, including advertising.
What are comparable store sales?
Comparable store sales, or comps, measure the year-over-year change in revenue from stores and digital channels that have been open long enough to be compared against themselves. The metric strips out growth from new store openings, so it isolates whether an existing footprint is gaining or losing share.
Where was Walmart stock trading before the report?
Walmart last closed at 115.27, down 0.39% on the day, against a prior close of 115.72 and a session range of 114.64 to 116.45, as of the last trade on Fri, 14 Aug 2026 at 20:00 GMT. That was slightly softer than the broad market on the same session.
Why does retail advertising revenue matter so much to Walmart's profit?
Advertising sold against traffic a retailer already owns carries far higher margins than groceries or consumables. When those revenue lines grow faster than the store base, reported operating profit can outpace the sales headline, meaning a modest comparable sales figure can coexist with expanding margins.
Does a reiterated Buy rating mean the analyst expects a beat?
No. A reiteration signals continuity — nothing in the analyst's model changed — rather than a fresh forecast about the specific quarter. It differs from an upgrade, which reflects a change of view, and from a raised price target, which reflects changed arithmetic. It is one input, not a prediction.
Sources
Photo: Gustavo Fring · Pexels Licence — source
