Donald Trump announced on Truth Social that he plans to increase tariffs on imports from China by 10%, while those from Canada and Mexico would also see a 25% rise in tariffs.
Retail stocks will be under pressure as tariffs increase.
Rupesh Parikh, an Oppenheimer analyst, believes that two of these companies are well-positioned to resist Trump’s tariffs.
Let’s take a look at what each of these two have in store for investors.
Walmart Inc (NYSE: WMT)
Walmart will remain resilient, according to an analyst at Oppenheimer, despite the higher tariffs that the new government will impose.
In a recent client note, he said that new taxes on imports from China and Canada could help WMT steal share from other retailers who are less strategically positioned.
Rupesh Paraikh is confident that Walmart’s stock will be able to withstand Trump’s tariffs, primarily because “two thirds of their sourcing come from the US market.”
Walmart has also invested aggressively to improve the in-store shopping experience, expand in ecommerce, and lower prices over the past few years. These investments will drive Walmart shares higher in 2025 according to Oppenheimer analyst.
WMT stock is attractive because it reported earnings that were better than expected last week and increased its guidance for the Holiday quarter, indicating continued strength in the coming month.
Walmart stock may be a good investment despite the expectation of higher tariffs. It pays a dividend of 0.90%. They can earn passive income, even if new taxes temporarily stall the share prices.
Costco Wholesale Corp. (NASDAQ: COST).
Costco’s stock has already risen by close to 50% in the past year, but Rupesh Parikh still sees further upside. He expects that it will hold up against higher tariffs under Trump.
Oppenheimer is still positive about COST, as it has a “very limited stock-keeping units assortment”. This is important because the retailer can “very quickly source different products” in order to manage the new tax.
Costco’s low prices make it a hugely popular retailer, which puts it in a great position to weather a possible economic slowdown. The warehouse retailer, which is only open to members, came out well above Street expectations in its last reported quarter.
The Nasdaq listed firm ended its most recent quarter with 32,3 million higher-tier memberships. This is an increase of 981,00 paid executive memberships from a year earlier.
Kelly Bania, an analyst at BMO Capital, raised her price target for COST to $1075 indicating a potential 12% increase from current levels.
Costco shares, like WMT shares, pay a dividend yield 0.48%. This makes them even more attractive to income investors.
This post Retail stocks resistant to Trump tariffs: Top picks for Investors may be modified as new developments unfold
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