Walmart Inc. Common Stock
WMT
$114.24
-0.62%
Walmart Inc. is the world's largest retailer, operating over 10,700 stores globally and serving 270 million customers weekly through its Walmart US, Walmart International, and Sam's Club segments, with fiscal 2026 sales exceeding $713 billion. As a dominant player in the discount store industry, Walmart leverages its massive scale and supply chain efficiency to offer everyday low prices, distinguishing itself as a cost leader. The current investor narrative centers on a sharp 20% pullback from highs amid concerns over slowing same-store sales and high valuation, with analysts questioning near-term guidance despite the company's strong e-commerce growth and resilient grocery business.…
WMT
Walmart Inc. Common Stock
$114.24
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Investment Opinion: Should I buy WMT Today?
Rating: Hold. Walmart is a high-quality defensive retailer with a dominant market position, but its current valuation (trailing P/E 43.48x) offers limited upside potential relative to risks. The analyst consensus is Buy with an average target of $138.59 (23% upside), but the wide target range ($81-$155) reflects high uncertainty. For long-term investors seeking stability, Walmart's consistent revenue growth (7.33% YoY), strong free cash flow ($12.55B TTM), and low beta (0.603) make it a portfolio anchor, but the entry point is not compelling at current levels.
Supporting Evidence: Walmart's revenue growth of 7.33% YoY is healthy for a mature retailer, and its net margin improved to 3.18% from 2.71% a year ago. The forward P/E of 34.25x implies expected earnings growth, but the PEG ratio of 3.29x suggests the stock is priced for above-average growth. The P/S ratio of 1.33x is above the industry average of 0.8x, confirming the premium. ROE of 21.98% is strong, indicating efficient capital use. However, the stock has underperformed the S&P 500 by 16.14% over three months, signaling near-term weakness.
Risks & Conditions: The biggest risks are valuation compression (P/E could contract to 30x if growth disappoints) and slowing same-store sales. This Hold would upgrade to Buy if the stock pulls back to $100 (P/E ~30x forward) or if revenue growth accelerates above 10%. It would downgrade to Sell if same-store sales turn negative or margins compress below 4%. Overall, Walmart is fairly valued relative to its history but overvalued relative to industry peers; the premium is justified by its scale and stability, but the risk/reward is balanced.
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WMT 12-Month Price Forecast
Walmart's outlook is balanced between its defensive growth profile and elevated valuation. The base case of steady growth and stable margins is most likely (50% probability), with the stock trading in a range near current levels. The bull case (30%) requires margin expansion and e-commerce acceleration to justify the premium multiple, while the bear case (20%) involves multiple contraction if growth disappoints. The neutral stance reflects the tension between analyst optimism (23% upside to average target) and the recent negative price momentum. An upgrade to bullish would require evidence of margin expansion or a significant pullback to a more attractive entry point. A downgrade to bearish would follow a clear deterioration in same-store sales or guidance.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Walmart Inc. Common Stock's 12-month outlook, with a consensus price target around $138.59 and implied upside of +21.3% versus the current price.
Average Target
$138.59
0 analysts
Implied Upside
+21.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$81 - $155
Analyst target range
Walmart is covered by 41 analysts, with a consensus recommendation of 'Buy' (mean recommendation 1.53 on a 1-5 scale, where 1 is Strong Buy). The average target price is $138.59, implying 23.2% upside from the current price of $112.53. The distribution leans bullish, with recent ratings from BTIG, UBS, and RBC Capital reiterating Buy/Outperform, while Freedom Broker upgraded from Sell to Hold. The consensus sentiment is clearly positive, expecting a recovery from the recent pullback. The target range spans from a low of $81.00 to a high of $155.00. The high target of $155 assumes successful margin expansion and e-commerce acceleration, while the low target of $81 reflects risks of competitive pressure and economic downturn. The wide spread of $74 (48% of the average) indicates high uncertainty among analysts. Recent downgrades or cautious notes (e.g., The Motley Fool highlighting slowing same-store sales) contrast with the bullish consensus, suggesting that while the average target is optimistic, there is significant dispersion in views. The high number of analysts and frequent updates (10 ratings in the last two months) indicate strong institutional interest and efficient price discovery.
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Bulls vs Bears: WMT Investment Factors
Walmart presents a classic tension between a high-quality defensive business and an expensive valuation. On the bull side, its unmatched scale, consistent revenue growth, strong free cash flow, and bullish analyst consensus (23% upside to average target) support a positive outlook. On the bear side, the trailing P/E of 43.48x is nearly double the industry median, the stock has sharply underperformed the market recently, and same-store sales growth is decelerating. The single most important factor that would resolve this debate is whether Walmart can deliver earnings growth sufficient to justify its premium multiple. If margins expand and e-commerce accelerates, the stock could re-rate higher; if growth disappoints, multiple contraction could drive the stock toward the $81 low target. Currently, the evidence slightly favors the bull case given the company's defensive characteristics and analyst support, but the valuation risk is significant.
Bullish
- Dominant Market Position and Scale: Walmart operates over 10,700 stores globally, serving 270 million customers weekly, with fiscal 2026 sales exceeding $713 billion. This massive scale provides unparalleled bargaining power with suppliers and cost advantages that competitors cannot easily replicate.
- Consistent Revenue Growth: Q1 2026 revenue grew 7.33% YoY to $177.75 billion, with stable multi-quarter growth. The Walmart US segment, contributing 66% of revenue, continues to drive growth through e-commerce expansion and grocery strength, reinforcing the company's defensive growth profile.
- Strong Free Cash Flow Generation: Walmart generated $12.55 billion in free cash flow over the trailing twelve months, despite heavy capex of $6.68 billion in Q1 2026. This cash flow supports a 34.3% payout ratio and a 0.79% dividend yield, providing a return to shareholders.
- Analyst Consensus Bullish with 23% Upside: With 41 analysts covering the stock, the consensus recommendation is Buy (mean 1.53 on a 1-5 scale) and the average target price is $138.59, implying 23.2% upside from the current price of $112.53. Recent ratings from BTIG, UBS, and RBC Capital reiterate Buy/Outperform.
Bearish
- Elevated Valuation Leaves No Room for Error: Walmart's trailing P/E of 43.48x is at a 98% premium to the discount store industry median of ~22x, and near the upper end of its 5-year historical range (15x-56x). The forward P/E of 34.25x still implies high expectations, making the stock vulnerable to multiple compression if growth disappoints.
- Recent 20% Pullback Signals Weakness: Walmart has dropped 20% from its 52-week high of $135.16 to $112.53, underperforming the S&P 500 by 7.46% in the last month and 16.14% over three months. This divergence suggests stock-specific selling pressure, potentially due to slowing same-store sales concerns.
- Slowing Same-Store Sales and Margin Pressure: Analysts have flagged slowing same-store sales, and operating margin slightly compressed to 4.22% in Q1 2026 from 4.31% a year ago. In a low-margin retail business, any further compression could significantly impact earnings and justify a lower multiple.
- High Uncertainty in Analyst Targets: The analyst target range spans from $81.00 (low) to $155.00 (high), a spread of $74 or 48% of the average target. This wide dispersion indicates significant disagreement about Walmart's future performance, with the low target implying 28% downside from current levels.
WMT Technical Analysis
Walmart's 1-year price change of +17.97% reflects a sustained uptrend, but the stock has pulled back significantly from its 52-week high of $135.16, currently trading at $112.53, which is 83.3% of the 52-week range. This positioning near the lower end of the range suggests a correction from overbought levels, potentially offering a value entry if the long-term trend resumes. The stock's beta of 0.603 indicates it is 40% less volatile than the S&P 500, making it a defensive holding, but the recent decline has been sharper than the market's 1-year gain of 20.92%, signaling stock-specific weakness. Over the past 1 month, Walmart has fallen 6.86%, while the S&P 500 gained 0.6%, resulting in a relative strength of -7.46%. The 3-month decline of 9.85% versus the S&P 500's 6.29% gain shows a clear divergence, with short-term momentum firmly bearish. This divergence could indicate a mean-reversion opportunity if the pullback is overdone, but the accelerating negative relative strength suggests persistent selling pressure. The 52-week low of $94.43 provides key support, while the high of $135.16 is resistance. A break below $94.43 would signal a trend reversal, while a move above $135.16 would confirm renewed strength. With a beta of 0.603, Walmart's lower volatility means its 20% drawdown from highs is more pronounced relative to its typical risk profile, warranting caution for position sizing.
Beta
0.60
0.60x market volatility
Max Drawdown
-18.9%
Largest decline past year
52-Week Range
$94-$135
Price range past year
Annual Return
+20.1%
Cumulative gain past year
| Period | WMT Return | S&P 500 |
|---|---|---|
| 1m | -3.3% | +0.3% |
| 3m | -10.4% | +4.7% |
| 6m | -4.6% | +7.5% |
| 1y | +20.1% | +18.4% |
| ytd | +1.3% | +9.0% |
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WMT Fundamental Analysis
Walmart's revenue trajectory remains solid, with Q1 2026 (ending April 30, 2026) revenue of $177.75 billion, up 7.33% year-over-year from $165.61 billion in Q1 2025. The multi-quarter trend shows consistent growth: Q2 2025 revenue was $177.40 billion, Q3 2025 $179.50 billion, and Q4 2025 $190.66 billion, indicating a stable growth rate. Segment-wise, Walmart US contributed $117.17 billion (66% of total), Walmart International $35.11 billion (20%), and Sam's Club $23.41 billion (13%), with the US segment driving the bulk of growth. The 7.3% YoY growth is healthy for a mature retailer, supported by e-commerce expansion and grocery strength, reinforcing the investment case for steady, defensive growth. Net income for Q1 2026 was $5.65 billion, up from $4.49 billion in the prior-year quarter, demonstrating profitability. Gross margin improved slightly to 25.14% from 24.94% a year ago, while operating margin was 4.22% versus 4.31% in Q1 2025, showing slight compression. Net margin rose to 3.18% from 2.71%, driven by lower interest expenses and tax rates. The trend over recent quarters shows stable gross margins around 25% and operating margins near 4%, typical for the low-margin retail industry, with no significant expansion or compression. Walmart's balance sheet is healthy, with a debt-to-equity ratio of 0.67 and a current ratio of 0.79, indicating adequate liquidity. Free cash flow (TTM) stands at $12.55 billion, though Q1 2026 FCF was negative -$1.95 billion due to heavy capex of $6.68 billion. ROE is strong at 21.98%, reflecting efficient capital use, and the company generates sufficient cash to fund growth internally, with a payout ratio of 34.3% supporting a 0.79% dividend yield.
Quarterly Revenue
$177.8B
2026-04
Revenue YoY Growth
+7.3%
YoY Comparison
Gross Margin
25.1%
Latest Quarter
Free Cash Flow
$12.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is WMT Overvalued?
Since Walmart has positive net income ($5.65 billion in Q1 2026), the trailing P/E ratio of 43.48x is the primary valuation metric. The forward P/E of 34.25x implies that earnings are expected to grow, narrowing the multiple, which suggests the market anticipates improved profitability. The gap between trailing and forward P/E indicates a 21% expected earnings growth, reflecting optimism about margin expansion and cost efficiencies. Compared to the industry average (discount stores), Walmart's trailing P/E of 43.48x is at a significant premium to the sector median of approximately 22x, representing a 98% premium. This premium is justified by Walmart's superior scale, brand strength, and consistent growth, but it leaves little room for error. The P/S ratio of 1.33x is also above the industry average of 0.8x, further confirming the premium valuation. Historically, Walmart's trailing P/E has ranged from 15x to 56x over the past five years. The current 43.48x is near the upper end of this band, close to the 52-week high of 56x seen in early 2026. This suggests the market is pricing in optimistic expectations for earnings growth and margin recovery. If growth disappoints, the multiple could contract, posing downside risk. Conversely, if Walmart delivers on expectations, the stock could re-rate higher.
PE
43.5x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 14x~60x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
21.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Walmart's primary financial risk is its high valuation — a trailing P/E of 43.48x leaves little margin for error. If earnings growth slows, the multiple could contract sharply, as seen in the recent 20% pullback from highs. The company's operating margin of 4.22% is thin, and any cost inflation or pricing pressure could compress it further, directly impacting net income. Additionally, free cash flow turned negative -$1.95 billion in Q1 2026 due to heavy capex, though TTM FCF remains strong at $12.55 billion. The debt-to-equity ratio of 0.67 is manageable, but the current ratio of 0.79 indicates potential liquidity tightness in a downturn.
Market & Competitive Risks: Walmart faces intense competition from discount retailers like Target, Costco, and Dollar Tree, as well as e-commerce giant Amazon. Recent news highlights Target's turnaround and Dollar Tree's gross margin recovery, signaling competitive pressure. The stock's beta of 0.603 makes it less volatile than the market, but its premium valuation means it is still vulnerable to sector rotation away from defensive stocks. Regulatory risks include potential changes to labor laws or trade tariffs that could increase costs. The recent analyst downgrade citing slowing same-store sales underscores the risk of deceleration in the core US business.
Worst-Case Scenario: In a severe recession or prolonged period of disappointing earnings, Walmart's stock could fall to its 52-week low of $94.43, representing a 16% decline from the current price of $112.53. If the low analyst target of $81.00 materializes, the downside would be 28%. This scenario would likely involve multiple compression to historical averages (e.g., 25x P/E) combined with earnings misses. The maximum drawdown over the past year was -18.91%, so a further decline to the 52-week low is plausible but not guaranteed.
FAQ
The primary risk is valuation compression: with a trailing P/E of 43.48x, any earnings disappointment could lead to a sharp multiple contraction, potentially driving the stock to the low analyst target of $81 (28% downside). Second, slowing same-store sales, as flagged by analysts, could indicate weakening demand and pressure margins. Third, competitive pressure from Target, Costco, and Amazon could erode market share or force price cuts, compressing the already thin operating margin of 4.22%. Fourth, macro risks such as a recession or higher interest rates could reduce consumer spending and increase Walmart's cost of capital. The stock's low beta (0.603) provides some cushion, but it is not immune to broad market downturns.
The 12-month outlook is balanced across three scenarios. The base case (50% probability) sees Walmart maintaining steady growth with revenue up 6-7% and stable margins, resulting in a target range of $115-$135. The bull case (30% probability) involves margin expansion and e-commerce acceleration, driving the stock to $135-$155. The bear case (20% probability) involves slowing sales and margin compression, pulling the stock down to $81-$100. The most likely scenario is the base case, with the stock trading near current levels. The analyst average target of $138.59 implies 23% upside, but achieving this requires positive earnings surprises. Key assumptions include stable consumer spending and no major competitive disruptions.
Walmart's trailing P/E of 43.48x is at a 98% premium to the discount store industry median of ~22x, and near the upper end of its 5-year historical range (15x-56x). The forward P/E of 34.25x still implies a premium, though it suggests expected earnings growth. The P/S ratio of 1.33x is also above the industry average of 0.8x. Historically, Walmart has traded at a premium due to its scale and stability, but the current multiple leaves little room for error. The market is pricing in optimistic expectations for margin expansion and e-commerce growth. Relative to its own history, the stock is fairly valued near the high end; relative to peers, it is overvalued. The valuation implies that investors expect continued steady growth and no major disruptions.
Walmart is a high-quality business with a dominant market position, consistent revenue growth (7.33% YoY), and strong free cash flow ($12.55B TTM). However, its trailing P/E of 43.48x is nearly double the industry median, implying high expectations. The analyst consensus is Buy with an average target of $138.59 (23% upside), but the wide target range ($81-$155) reflects significant uncertainty. For long-term investors seeking a defensive anchor, Walmart is a good buy on pullbacks, particularly if the stock falls to $100 or below. For growth-oriented investors, the premium valuation limits upside potential. The biggest downside risk is multiple compression if earnings disappoint, which could lead to a 16-28% decline from current levels.
Walmart is best suited for long-term investment due to its defensive characteristics, low beta (0.603), and consistent dividend growth (yield 0.79%, payout ratio 34.3%). The stock's low volatility and stable earnings make it a core holding for conservative portfolios. For short-term trading, the recent 20% pullback and negative relative strength (-7.46% vs S&P 500 over 1 month) suggest near-term weakness, but the stock could rebound if earnings surprise positively. However, the high valuation limits short-term upside potential. A minimum holding period of 3-5 years is recommended to allow the earnings growth to catch up with the premium multiple. Short-term traders should focus on technical levels around $110 support and $120 resistance.
