Walmart (WMT) continues to gain market share and expand its alternative revenue streams despite a slight slowdown in sales growth during Q4, UBS Securities said in a report emailed Friday.

Walmart (WMT) reported fiscal Q4 adjusted earnings Thursday of $0.66 per diluted share, up from $0.60 a year ago, with revenue rising to $180.55 billion from $173.39 billion.

The retail giant reported a 4.6% increase in US comparable sales, though eCommerce growth moderated to 20% from 22% in recent quarters. Walmart still exceeded the mid-point of its EPS guidance by about 11%, reinforcing investor confidence in its long-term strategy, UBS said.

The company's transformation efforts, including growth in advertising, marketplace sales, and store-fulfilled delivery, are driving profitability, with alternative revenue streams adding over $250 million to operating income and global advertising revenue rising 29% in Q4, UBS said.

Walmart projected 2025 EPS between $2.50 and $2.60, below the consensus estimate of $2.77, citing a stable consumer outlook but ongoing product mix pressures, the report said. "While [Walmart's] guidance was below consensus, we think it is a prudent step for the company to take a conservative stance, considering the uncertainties in the macro," it added.

Bulls see the pullback in Walmart's stock as a buying opportunity, expecting continued earnings growth. Bears, however, argue that valuation remains high and macroeconomic uncertainties could pressure margins, UBS said.

Looking ahead, Walmart expects steady sales growth of 3-4% in 2025, with continued expansion in eCommerce and alternative businesses, UBS said.

UBS maintained a buy rating on Walmart and adjusted its price target to $112 from $113.

Price: 95.70, Change: -1.51, Percent Change: -1.55