As Walmart gears up for its Q3 earnings report, investors are taking notice of some very promising signals in the eCommerce space. UBS analyst Michael Lasser has recently highlighted findings from his 11th annual eCommerce survey of 2,500 U.S. consumers, and the results look favorable for Walmart (WMT) shareholders. Lasser, who is bullish on the stock, believes that these insights underscore the potential for Walmart’s share growth. Here’s a closer look at why Walmart’s online strategy is paying off and why its Q3 performance could exceed expectations.

1. eCommerce Penetration Accelerates, Even in Rural Areas

The shift to online shopping is not new, but Lasser’s survey shows that this trend is far from slowing down. Even as pandemic-driven shopping behaviors have stabilized, the demand for eCommerce remains strong. Interestingly, Walmart has managed to expand its online reach even in traditionally underserved rural areas, where digital adoption has often lagged. This broader market penetration is a positive sign for Walmart, suggesting that the company’s infrastructure and online offerings are resonating across a diverse customer base.

2. Walmart+ Membership is Growing Steadily

Walmart+—the retail giant’s answer to Amazon Prime—has been one of Walmart’s most significant innovations in recent years. Designed to boost customer loyalty, Walmart+ offers a suite of benefits, from free delivery to fuel discounts. According to the survey, Walmart+ membership has surged, with 35% of respondents identifying as members, up from 28% last year. Not only is membership growing, but usage has also increased, indicating that members see value in their subscription. With Walmart+ set to play a key role in Walmart’s eCommerce strategy, this uptick in membership is a positive indicator of Walmart’s future online engagement.

3. Walmart’s U.S. Momentum Holds Strong

Walmart’s performance in the U.S. continues to impress. Lasser’s survey suggests that Walmart should be able to hit a 5% comp for Q3, a figure he believes is achievable. This growth shows that Walmart is holding onto the momentum it gained during the pandemic, suggesting a solid Q3 performance and offering Walmart a chance to continue capitalizing on this growth for the rest of the fiscal year.

4. Q3 Earnings Preview and Q4 Guidance Expectations

Based on these findings, Lasser is optimistic that Walmart’s Q3 earnings could exceed market expectations. If Walmart can meet or beat the 5% comp target for the quarter, he expects this will positively impact Walmart’s Q4 guidance, with earnings anticipated at $2.45 or higher per share. Strong Q3 results could bolster confidence and help Walmart gain additional traction among investors who are looking for reliable, growth-oriented stocks.

The Bottom Line for Walmart Investors

As Walmart heads into its Q3 earnings report, the outlook appears bright. With continued growth in eCommerce penetration, an expanding Walmart+ membership base, and strong U.S. sales momentum, Walmart’s digital strategy is well-positioned to drive shareholder value. If Lasser’s predictions hold, Walmart could be set for robust earnings that may lead to further gains for its stock.

For investors considering Walmart, the company’s resilient online growth, strengthened customer loyalty, and positive consumer trends make it a compelling pick in the retail space. Walmart’s commitment to innovating and adapting to shifting consumer preferences positions it as a strong player in the eCommerce landscape—one that could bring notable returns for its shareholders in the months ahead.