Thoughts Ahead of Big Box Earnings; Prefer TGT while BJ Carries the Most Risk

Research evidence excerpt

Thoughts Ahead of Big Box Earnings; Prefer TGT while BJ Carries the Most Risk

Equity Research

Multi Company Update — May 12, 2026

Food & Staples Retail

Thoughts Ahead of Big Box Earnings; Prefer

TGT while BJ Carries the Most Risk

Our Call Edward Kelly, CFA

TGT setup looks encouraging, w/ potential Q1 upside & a guidance raise, particularly on Equity Analyst | Wells Fargo Securities, LLC

Edward.J.Kelly@wellsfargo.com | 212-214-5304

sales. WMT results should be solid yet again, but expected and fuel may hinder the beat/

John Parkeraise. BJ set for tougher print with fuel/pre-opening headwinds.

Associate Equity Analyst | Wells Fargo Securities, LLC

John.Parke@wellsfargo.com | 212-214-3327

Key Factors At Play: A dynamic Q1 earnings season is on deck, given: the three-pronged Adam Gregorio

impact from higher oil prices hitting (diesel weighing on supply chain costs/GPMs, fuel Associate Equity Analyst | Wells Fargo Securities, LLC

margins, and consumer spending impact on go fwd basis), potential tariff refunds, and the Adam.Gregorio@wellsfargo.com | 212-214-8117

degree to which tax refunds helped Q1/carry over into Q2. With time, companies can likely

find offsets for higher diesel, but Q2 likely to see the brunt of the pressure if prices don't

start to come down soon.

WMT Slight Q1 Beat Likely, but Expected: Expect a solid start to '26, w/ some modest

upside likely to our 3.5% US SSS/$0.65 EPS (bar ~4.25%, small EPS beat), given data reads

& positive mgmt commentary on refunds. Higher diesel may limit flow-thru on upside/

could mute Q2 OI guide at the margin; consistent w/ historical tendency, we don't expect

to see a raise to FY guide. Consumer/freight/roll-back commentary key for broader group.

Don't see flywheel slowing and remain OW.