Walmart Inc.’s exposure to lower-income shoppers who are feeling the pressure of inflation is cause for concern to Truist Securities heading into the retail giant’s fiscal first-quarter earnings, scheduled for Tuesday before the opening bell.

“[W]e are growing increasingly cautious on the spending power of low-to-middle income consumers due to less government stimulus, 40-year high inflation and flattening wage growth,” analysts led by Scot Ciccarelli wrote in a report.

“Given this headwind, coupled with the stock’s recent outperformance, we believe that it may be more difficult to generate incremental upside from current levels.”

Walmart’s stock WMT, +0.39% has gained a little more than 1% this year through morning trading on Friday, while the SPDR S&P Retail exchange-traded fund XRT, +3.33% has tumbled 26% and the Dow Jones Industrial Average DJIA, +1.47% has shed 12%.

Truist rates Walmart stock hold.

Read: Lower-income consumers will start tightening their belts by trading down to private label goods in 2022, analysts say

That said, both Truist and Cowen analysts are upbeat about Walmart’s grocery business, with Cowen analysts expecting Walmart to continue market-share gains amid inflationary pricing, which is making shoppers more budget conscious.

“Both Walmart and Target are creatively working through rising input costs while passing on some of the increases to shoppers,” wrote Cowen analysts.

“We are impressed Walmart has been able to slightly widen their price gaps versus competition (as of 4Q22), which has helped the retailer gain market share.”

Cowen rates Walmart stock outperform with a $180 price target, up from $165.

Target Corp. TGT, +1.13% is scheduled to report first-quarter earnings on Wednesday before the market opens. Cowen also rates Target stock outperform with a $265 price target.

Walmart has an average overweight stock rating, based on 35 analysts polled by FactSet. The average target price is $166.03.

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Here are other items to know heading into Walmart’s earnings.

Earnings: The FactSet consensus is for earnings per share of $1.48, down from $1.69 last year.

Estimize, which crowdsources estimates from sell-side and buy-side analysts, hedge-fund managers, executives, academics and others, forecasts EPS of $1.54.

Walmart has exceeded the FactSet EPS consensus the last four quarters.

Revenue: FactSet forecasts revenue of $138.835 billion, up slightly from $138.310 billion last year.

The Estimize forecast is for revenue of $140.263 billion.

Walmart has beaten the FactSet revenue consensus the last eight quarters.

Stock price: Walmart stock had advanced 9% over the last three months through Thursday, and was up 2% for the year to date.

The Dow Jones Industrial Average had tumbled 12.7% for 2022 so far.

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Other items:

Walmart’s advertising business is a margins booster. “Importantly, digital advertising and [third-party] have significantly higher margins than the core business, and help support margins during more challenging cost backdrops,” wrote Cowen.

Walmart is one of a number of retailers to launch an advertising business, including Amazon.com Inc. AMZN, +5.73%, Kroger Co. KR, -1.53% and Best Buy Co Inc. BBY, -1.14%

Walmart adds fuel to its membership program. Walmart announced late April that it is boosting the gas benefit for Walmart+ members, offering a discount of up to 10 cents per gallon at more than 14,000 stations.

“Ninety-one percent of our customers are aware of the increased prices at the pump and nearly half of those told us they are changing behaviors because of them,” said Chris Cracchiolo, senior vice president of Walmart+, in a statement.

“More access to a bigger discount will make a difference for our customers.”

While the latest government inflation data showed a decline in gas prices, the discount could become an added benefit to members during the summer driving season.

Other Walmart+ benefits include free shipping and grocery delivery, and six months of free Spotify Premium.

Walmart+ shoppers tend to be more frequent shoppers, so boosting membership in the program is important to the retailer. EMarketer quotes Bizrate data showing that only 15% of U.S. households have Walmart+ access versus 62% with Amazon Prime access.

EMarketer also notes that Walmart+ membership fell after the 2021 holiday season.

“While gas discounts may spur some shoppers to enroll in Walmart+, the retailer needs to ensure that it offers a wide enough array of benefits to keep them enrolled,” eMarketer wrote.