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- CNBC’s Jim Cramer said Walmart’s roughly 18% pullback since its mid-May peak has created a buying opportunity.
- He said falling fuel prices, Walmart’s value proposition and potential tariff refunds could all become tailwinds for the company.
CNBC’s Jim Cramer said Tuesday that Walmart’s recent sell-off stands out as one of the most compelling buying opportunities among the market’s largest players. “I think you’re getting an incredible buying opportunity here, because the stock’s been getting pummeled right as Walmart’s biggest worries have started to fade away,” the ” Mad Money ” host said. “Walmart’s worth buying into weakness here, especially if you missed out on the fantastic rally over the past couple of years.” Shares of Walmart have struggled since reporting first-quarter earnings , down roughly 17.5% from the May 19 record close. For the year, the stock is roughly flat, trailing a basket of retail stocks and the broader market. While investors focused on softer margins and guidance that fell short of Wall Street’s expectations, Cramer said investors overlooked several encouraging trends. “This really wasn’t a bad quarter by any stretch of the imagination,” he said, pointing to better than expected revenue, with same-store sales and earnings matching expectations. According to Cramer, much of the market’s concern centered on higher fuel costs, which weighed on Walmart’s profitability outlook and threatened to squeeze consumer spending. But with oil and gasoline prices falling sharply since the company reported earnings, he said one of the stock’s biggest headwinds has largely faded. A softer consumer backdrop should also work in Walmart’s favor rather than against it, Cramer argued, as shoppers increasingly seek value. The retailer’s announcement Tuesday that it has lowered prices on food, beverages, outdoor living, toys, and apparel reinforces this thesis. “While consumers are struggling a bit, Walmart’s going to be an ideal destination for shoppers,” he said. “It’s a trade down play … that has a lot of incredible value.” Another potential catalyst, Cramer said, is the possibility of tariff refunds . CFO John David Rainey has said any refunds are not reflected in its current guidance and could be used to fund additional price cuts. “The way we see it, there’s two potential outcomes,” Cramer said. “First, Walmart could simply get a financial benefit from tariff refunds, which means upside surprise because it’s not in the numbers. Second, and more likely, the company could use any benefit from tariff refunds to lean into further savings for its customers — basically passing the tariff refunds on to their shoppers.” Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com
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