Walmart Inc. (NYSE:WMT) reported Q1 results, with revenue of $141.6 billion coming in better than the consensus estimate of $138.88 billion, while EPS of $1.30 missing the consensus estimate of $1.48. The company’s shares lost around 17% this week.

While the company maintained top-line momentum, comments about consumer trade down and elevated general merchandise inventory levels are semi-concerning. Analysts at RBC Capital expect inflation-led pricing to continue to support the top-line near-term but they will be paying close attention to elasticity levels - especially in more discretionary categories.

The analysts adjusted their 2023/2024 US comp estimates to 3.5%/2.5% from the previous 3.2%/3.0% range and EPS to $6.40/$6.94 from the previous $6.75/$7.24.

While the quarterly results and the 2023 EPS guidance of a 1% decline were disappointing, the analysts believe the company is one of the 'safest' plays in an uncertain macro environment. The analysts maintained their outperform rating but lowered their price target to $153 from $160.