CNBC's Jim Cramer stated that Walmart's approximately 18% decline since mid-May has created a buying opportunity. He mentioned that falling fuel prices, Walmart's value proposition, and potential tariff refunds could all serve as tailwinds for the company.
"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.
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 pointed out several encouraging trends that investors overlooked.
"This really wasn't a bad quarter by any stretch of the imagination," he said, highlighting better-than-expected revenue.
According to Cramer, much of the market's concern centered on higher fuel costs, which weighed on Walmart's profitability outlook. However, with oil and gasoline prices falling sharply since the company reported earnings, he stated that one of the stock's biggest headwinds has largely faded.
A softer consumer backdrop should also work in Walmart's favor, as shoppers increasingly seek value. The retailer's announcement 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.
Another potential catalyst, Cramer noted, is the possibility of tariff refunds.
