Walmart Inc. Common Stock
WMT
$121.25
+2.09%
Walmart Inc. is the world's largest retailer, operating more than 10,700 stores globally across three reporting segments — Walmart US (68% of fiscal 2026 sales), Walmart International (19%), and Sam's Club (13%) — and serving roughly 270 million customers weekly across grocery, general merchandise, and e-commerce, with fiscal 2026 sales exceeding $713 billion. Its competitive identity rests on unmatched scale, a low-price value proposition, and an increasingly sophisticated omnichannel and supply-chain machine that has made it a share-gainer even as discretionary retail softens. The current investor narrative centers on whether Walmart's defensive, grocery-heavy mix and tariff-refund-driven price investment can sustain its recent earnings momentum after a strong Q2 beat and raised guidance, while skeptics point to operating income growth lagging sales, elevated costs, and a premium valuation that leaves little room for error. A higher-for-longer rate backdrop and Fed tightening headlines have reinforced Walmart's status as a resilient value retailer relative to rate-sensitive peers like Home Depot and Target, keeping the stock in the spotlight as a defensive growth compounder.…
WMT
Walmart Inc. Common Stock
$121.25
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Investment Opinion: Should I buy WMT Today?
Rating: Hold. Walmart is a high-quality defensive compounder with consistent 5–6% revenue growth, a fortress balance sheet (0.67 D/E, 21.98% ROE, $13.51B TTM FCF), and unanimous analyst support (40 analysts, 'buy' consensus, mean rating 1.51, average target $127.48 implying +6.3% upside), but the current 43.48x trailing PE already discounts much of that quality, leaving a balanced risk/reward at $119.89.
Supporting evidence: revenue grew 5.94% YoY to $187.94 billion in Q2 fiscal 2027; gross margin held stable at 26.14% while net margin compressed to 3.07% from 3.96%; TTM free cash flow of $13.51 billion comfortably funds $7.50 billion of capex, $1.97 billion of dividends, and $3.02 billion of buybacks; and the stock trades at 1.33x PS and 21.68x EV/EBITDA versus a discount-retail sector where PEs typically sit in the high-teens to low-20s. The forward PE of 37.16x on consensus EPS of $4.23 still represents a substantial premium to peers, justified only by Walmart's scale, defensive grocery mix, and share-gain momentum.
Risks and conditions: the biggest risks are persistent margin compression (net income already fell to $6.37 billion from $7.03 billion YoY), operating income growth lagging sales, and a valuation that leaves no margin of safety. This Hold would upgrade to Buy if operating income growth reaccelerates above revenue growth and the forward PE compresses below 30x, or if the stock pulls back toward the $105–$110 support zone; it would downgrade to Sell if net margin falls below 2.5% or revenue growth decelerates below 4%. Verdict: fairly valued to modestly overvalued relative to its own history (43.5x sits in the upper quartile of its multi-year 13.6x–56.2x band) and at a clear premium to peers — a quality holding, not a compelling entry point.
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WMT 12-Month Price Forecast
Walmart is a high-quality defensive compounder whose consistent 5–6% revenue growth, fortress balance sheet, and unanimous analyst support justify a premium multiple, but the current 43.48x trailing PE already prices in much of that quality. The key tension is margin trajectory: net income fell YoY despite higher revenue, and operating income growth is lagging sales, which caps near-term upside toward the $127.48 consensus target. The recent 8.47% one-month rally and 9.49-point relative strength versus SPY suggest momentum is positive, but the stock remains 11.3% below its 52-week high and in the upper quartile of its historical valuation band. I would upgrade to bullish if Q3 shows operating income growth reaccelerating above revenue growth, and downgrade to bearish if net margin falls below 2.5% or the stock breaks below the $102.63 August low.
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 $127.47 and implied upside of +5.1% versus the current price.
Average Target
$127.47
0 analysts
Implied Upside
+5.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$81 - $155
Analyst target range
Coverage is deep and overwhelmingly constructive: 40 analysts cover Walmart with a consensus recommendation of "buy" (mean rating of 1.51 on a 1–5 scale where 1 is strong buy), and the average target price of $127.48 implies roughly +6.3% upside from the current $119.89. The consensus leans clearly bullish, and recent institutional actions reinforce that stance — Mizuho reiterated Outperform on September 29, while DA Davidson, BTIG, Wells Fargo, JP Morgan, Morgan Stanley, Guggenheim, and UBS all reaffirmed Buy/Overweight ratings in August and September, with no downgrades in the visible record.
The target range spans a low of $81.00 to a high of $155.00 — a wide 91% spread that signals meaningful disagreement about the trajectory of margins and costs. The $155 high target likely assumes successful margin recovery, continued mid-single-digit revenue growth, and multiple expansion toward the upper end of historical ranges, while the $81 low target appears to price in margin compression, cost inflation eroding operating leverage, and a de-rating toward sector-average multiples. The wide dispersion, combined with a consensus target only modestly above the current price, suggests analysts see limited near-term upside and are waiting for evidence that operating income growth can reaccelerate before raising targets — a cautious-but-constructive posture for a defensive mega-cap.
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Bulls vs Bears: WMT Investment Factors
The bull case currently has stronger evidence: Walmart is delivering consistent 5–6% revenue growth at enormous scale, carries a fortress balance sheet (0.67 D/E, 21.98% ROE, $13.51B TTM FCF), and enjoys unanimous analyst support with a 'buy' consensus and no visible downgrades. The bear case rests primarily on valuation and margin pressure — a 43.5x trailing PE against a 3.07% net margin means the market is paying a quality premium, not a profitability premium, and operating income growth is lagging sales. The single most important tension is whether Walmart can reaccelerate operating income growth through cost control and tariff-refund-driven price investment; if it can, the premium multiple is justified and the stock can challenge its $135 high, but if margin compression persists, the 43x multiple leaves significant downside toward the $81 analyst low. Near-term momentum and defensive positioning favor the bulls, but the risk/reward is balanced rather than compelling at current levels.
Bullish
- Defensive growth at scale: Q2 fiscal 2027 revenue rose 5.94% YoY to $187.94 billion, extending a consistent mid-single-digit cadence (Q1 $177.75B, Q4 $190.66B, Q3 $179.50B) that is rare for a $713 billion-revenue retailer. This grocery-heavy mix (nearly 60% of US revenue) makes Walmart a share-gainer even as discretionary retail softens.
- Analyst consensus firmly bullish: 40 analysts rate WMT a 'buy' with a mean rating of 1.51 (1=strong buy) and an average target of $127.48, implying +6.3% upside from $119.89. No downgrades appear in the visible record, with Mizuho, Wells Fargo, JP Morgan, Morgan Stanley, and UBS all reaffirming Buy/Overweight in August–September.
- Low beta defensive profile: Beta of 0.578 makes Walmart roughly 42% less volatile than the market, supporting larger position sizing for risk-parity investors. This defensive characteristic has been rewarded as higher-for-longer rates separate resilient models like Walmart from rate-sensitive peers such as Home Depot and Target.
- Strong balance sheet and cash generation: Debt-to-equity is a conservative 0.67, ROE is a robust 21.98%, and TTM free cash flow is $13.51 billion. Q2 operating cash flow of $14.97 billion comfortably funded $7.50 billion of capex, $1.97 billion of dividends, and $3.02 billion of buybacks, with interest coverage near 35.7x.
Bearish
- Premium valuation leaves no margin of safety: At 43.48x trailing and 37.16x forward PE, WMT trades at roughly double the high-teens-to-low-20s industry average for discount retail. The PEG of 3.29, EV/EBITDA of 21.68x, and price-to-FCF of 118x signal a quality premium that is vulnerable to any growth disappointment.
- Operating income growth lagging sales: Q2 operating income of $9.38 billion (4.99% margin) grew slower than the 5.94% revenue increase, and net income fell to $6.37 billion from $7.03 billion a year ago despite higher sales. Recent coverage explicitly flags higher costs and a guidance mix showing operating income growth lagging sales as a near-term upside constraint.
- Margin compression evident: Net margin of 3.07% is down from 3.96% in the year-ago Q2, and operating margin of 4.18% trails the prior year's 4.11% only marginally while net income declined. Price investment and cost inflation are eroding incremental profitability, leaving little room for error at a 43x multiple.
- Limited analyst upside: The consensus target of $127.48 implies only +6.3% upside, and the wide $81–$155 range (91% spread) signals meaningful disagreement about margin trajectory. Analysts appear to be waiting for evidence of operating income reacceleration before raising targets, capping near-term re-rating potential.
WMT Technical Analysis
Walmart is in a choppy but net-positive uptrend, with the stock up 12.19% over the past year and 6.32% year-to-date, though it remains 11.3% below its 52-week high of $135.16 and 21.2% above its 52-week low of $98.88 — placing the current $119.89 price at roughly 58% of its 52-week range. That mid-range positioning signals neither momentum-driven overextension nor a falling-knife setup, but rather a stock digesting a sharp mid-year drawdown (max drawdown of -23.52%) while rebuilding its base. The 6-month change of -7.72% versus the 1-year gain of +12.19% confirms the recovery is still incomplete and the longer-term trend has flattened into consolidation.
Short-term momentum has turned decisively positive: the stock is up 8.47% over the past month and 9.52% over three months, a sharp acceleration from the negative 6-month print and a clear reversal of the summer weakness that bottomed near $102.63 in late August. This is corroborated by relative strength, with WMT outperforming SPY by 9.49 percentage points over the past month and 6.67 points over three months, even as its 6-month relative strength of -14.17 points shows how much ground it ceded earlier in the year. The divergence between strong 1-month/3-month momentum and a negative 6-month trend is characteristic of a mean-reversion rally off oversold conditions rather than a fresh breakout, and the recent push from $104 in early October to $121.12 on October 22 suggests buyers are regaining control.
Key technical levels are well defined: support sits at the 52-week low of $98.88, with a secondary floor near the August/September base around $102.63–$104, while resistance looms at the 52-week high of $135.16 and the prior May peak near $134.20. A breakout above $135 would signal a resumption of the longer-term uptrend and likely invite momentum buyers, whereas a breakdown below $102 would invalidate the recovery and reopen the lows. With a beta of just 0.578, Walmart is roughly 42% less volatile than the market, which supports larger position sizing for risk-parity investors but also means the stock will lag in broad risk-on rallies — a profile consistent with its defensive Consumer Defensive classification.
Beta
0.58
0.58x market volatility
Max Drawdown
-23.5%
Largest decline past year
52-Week Range
$99-$135
Price range past year
Annual Return
+18.3%
Cumulative gain past year
| Period | WMT Return | S&P 500 |
|---|---|---|
| 1m | +13.5% | +0.7% |
| 3m | +9.0% | +3.0% |
| 6m | -7.9% | +6.8% |
| 1y | +18.3% | +11.9% |
| ytd | +7.5% | +12.8% |
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WMT Fundamental Analysis
Revenue is growing at a healthy clip for a retailer of this scale: Q2 fiscal 2027 revenue reached $187.94 billion, up 5.94% year-over-year from $177.40 billion, and the multi-quarter trend shows steady mid-single-digit expansion (Q1 at $177.75 billion, Q4 at $190.66 billion, Q3 at $179.50 billion). Segment data shows Walmart US contributing $125.19 billion, International $35.20 billion, and Sam's Club $25.71 billion, with the domestic grocery-heavy core and international operations (notably Mexico and India) driving the bulk of growth. This consistent 5–6% top-line cadence, rare for a $713 billion-revenue behemoth, underpins the investment case as a share-gaining compounder rather than a mature stalwart.
Profitability is solid but under pressure at the margin: Q2 net income was $6.37 billion on a 26.14% gross margin and 3.39% net margin, with operating income of $9.38 billion (4.99% operating margin). Gross margin has been remarkably stable in the 24.7%–26.1% band across recent quarters, but net income declined from $7.03 billion in the year-ago Q2 despite higher revenue, and operating income growth is lagging sales — a dynamic flagged in recent coverage as a near-term upside constraint. The 4.18% operating margin and 3.07% net margin are typical-to-strong for discount retail, but the compression versus the prior year's 3.96% net margin suggests cost inflation and price investment are eroding incremental profitability.
Financial health is sound but capital-intensive: debt-to-equity stands at 0.67, ROE is a robust 21.98%, and TTM free cash flow is $13.51 billion, though quarterly FCF is lumpy ($7.48 billion in Q2 versus -$1.95 billion in Q1 due to $6.68 billion of capex). The current ratio of 0.79 reflects Walmart's famously lean working-capital model rather than distress, and interest coverage of roughly 35.7x on the latest quarter confirms ample debt-service capacity. With $14.97 billion of Q2 operating cash flow funding $7.50 billion of capex, $1.97 billion of dividends, and $3.02 billion of buybacks, Walmart generates enough internal cash to fund growth and returns, though the thin 0.79% dividend yield and 34.3% payout ratio leave modest room for income-focused investors.
Quarterly Revenue
$187.9B
2026-07
Revenue YoY Growth
+5.9%
YoY Comparison
Gross Margin
26.1%
Latest Quarter
Free Cash Flow
$13.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is WMT Overvalued?
Because Walmart is solidly profitable (Q2 net income of $6.37 billion), the PE ratio is the appropriate primary metric. The stock trades at a trailing PE of 43.48x versus a forward PE of 37.16x, and the gap implies the market expects meaningful EPS growth — consistent with consensus estimated EPS of $4.23 versus the trailing figure — though even the forward multiple is rich for a low-margin retailer. The PEG ratio of 3.29 and EV/EBITDA of 21.68x reinforce that investors are paying a substantial growth premium.
Against a discount-retail sector where industry-average PEs typically sit in the high-teens to low-20s, Walmart's 43.5x trailing PE represents a premium of roughly 100% or more, and its 1.33x PS ratio and 9.55x P/B are also elevated for the industry. This premium is partly justified by Walmart's unmatched scale, defensive grocery mix, consistent 5–6% revenue growth, and 21.98% ROE, but a 3.07% net margin and 4.18% operating margin mean the multiple is not supported by margin leadership — it is a quality-and-consistency premium rather than a profitability premium, leaving the stock vulnerable to any growth disappointment.
Historically, Walmart's PE has ranged from roughly 13.6x (Q2 2023) to 56.2x (Q4 2026), with the current 43.5x sitting in the upper quartile of its own multi-year band and well above the ~20–35x range that prevailed through 2021–2024. The P/B of 9.55x is near the top of its historical range (versus ~5.1x in early 2023), and the price-to-free-cash-flow ratio of 118x is extreme. This positioning suggests the market is pricing in optimistic expectations for continued share gains and margin recovery; while not necessarily a sell signal for a quality compounder, it limits the margin of safety and makes the stock sensitive to execution risk.
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 and operational risks center on margin compression and the dependence on continued growth to justify valuation. Q2 net income fell to $6.37 billion from $7.03 billion a year ago despite a 5.94% revenue increase, with net margin slipping to 3.07% from 3.96%, and operating income growth is lagging sales as higher costs and price investment bite. The current ratio of 0.79 reflects Walmart's lean working-capital model but offers little liquidity buffer if conditions tighten, and quarterly free cash flow is lumpy ($7.48 billion in Q2 versus -$1.95 billion in Q1 due to $6.68 billion of capex). With a 34.3% payout ratio and a thin 0.79% dividend yield, income investors have limited cushion, and the 118x price-to-FCF ratio means any cash-flow miss would be punished severely.
Market and competitive risks are dominated by valuation compression. At 43.48x trailing and 37.16x forward PE versus a discount-retail industry average in the high-teens to low-20s, WMT trades at roughly a 100% premium, and its 9.55x P/B is near the top of its historical range versus ~5.1x in early 2023. A beta of 0.578 limits downside in broad selloffs but also means the stock will lag in risk-on rallies, and sector rotation away from Consumer Defensive would pressure the multiple. Recent news highlights that a higher-for-longer rate environment separates resilient models like Walmart from rate-sensitive peers, but also that tariff refunds are being used to lower prices — a competitive dynamic that could compress industry margins if rivals match. Amazon's accelerating AWS growth and robotics efficiency, highlighted as Morgan Stanley's top pick with 30%+ upside, represents a structural competitive threat in e-commerce and grocery.
Worst-case scenario: a consumer slowdown combined with persistent cost inflation forces Walmart to choose between price investment and margin, causing operating income to decline and triggering a de-rating from 43x toward the sector-average high-teens multiple. In this scenario, the stock could fall to the analyst low target of $81.00, a decline of roughly -32% from the current $119.89, or toward the 52-week low of $98.88 (-17.5%). A more severe outcome incorporating the historical max drawdown of -23.52% would put the stock near $91.70. The realistic downside range is therefore -17% to -32%, with the $81 low target representing the tail risk if margin compression proves structural rather than cyclical.
FAQ
The most severe risk is margin compression: Q2 net income fell to $6.37 billion from $7.03 billion a year ago despite 5.94% revenue growth, with net margin slipping to 3.07% from 3.96%, and operating income growth is lagging sales. Second is valuation compression risk: at 43.48x trailing PE versus a high-teens-to-low-20s industry average, a de-rating toward sector multiples could drive the stock toward the $81 analyst low, a -32% decline. Third is competitive pressure from Amazon, which Morgan Stanley named its top pick with 30%+ upside on accelerating AWS growth and robotics efficiency, threatening Walmart's e-commerce and grocery share. Fourth is macro sensitivity: while the 0.578 beta limits downside, a consumer slowdown from higher-for-longer rates could force deeper price investment and further margin erosion. Ranked by severity: margin compression, valuation de-rating, competitive disruption, then macro headwinds.
The 12-month forecast has three scenarios: a base case (50% probability) of $120–$135, assuming mid-single-digit revenue growth, stable ~26% gross margins, and a range-bound multiple tracking toward the $127.48 analyst average; a bull case (25% probability) of $135–$155, requiring operating income growth to reaccelerate above revenue growth and a breakout above the $135.16 52-week high toward the $155 analyst high; and a bear case (25% probability) of $81–$99, driven by margin compression below 3% and a de-rating toward the $98.88 52-week low or $81 analyst low. The base case is most likely, with the key assumption being that Walmart sustains 5–6% revenue growth while gross margin holds in the 25–26% band despite price investment. The wide $81–$155 analyst range reflects genuine disagreement about margin trajectory, and the consensus target of $127.48 implies only +6.3% upside.
WMT appears modestly overvalued on most metrics. The trailing PE of 43.48x and forward PE of 37.16x compare to a discount-retail industry average typically in the high-teens to low-20s, representing a premium of roughly 100% or more. The PEG ratio of 3.29, EV/EBITDA of 21.68x, P/B of 9.55x, and price-to-FCF of 118x all reinforce that investors are paying a substantial quality premium. Relative to its own history, the current 43.5x sits in the upper quartile of a multi-year range from 13.6x to 56.2x, and well above the ~20–35x band that prevailed through 2021–2024. The market is pricing in optimistic expectations for continued share gains and margin recovery; while not necessarily a sell signal for a quality compounder, it limits the margin of safety and makes the stock sensitive to execution risk.
From a risk/reward perspective, WMT offers modest upside of +6.3% to the analyst average target of $127.48 against downside risk of -17.5% to the 52-week low of $98.88 and -32% to the analyst low of $81.00, a roughly 1:3 to 1:5 reward-to-risk ratio that is not compelling at $119.89. The valuation at 43.48x trailing PE is roughly double the discount-retail industry average, leaving little margin of safety, though the 0.578 beta and defensive grocery mix provide downside protection in a volatile market. The stock is a good buy for conservative, long-term investors seeking low-volatility consumer staples exposure with a 3–5 year horizon, particularly on pullbacks toward the $105–$110 support zone. It is less attractive for investors seeking near-term capital appreciation, given the limited analyst upside and margin pressure. A confirmed reacceleration in operating income growth would improve the risk/reward materially.
WMT is best suited for long-term holding with a minimum suggested horizon of 3–5 years. Its growth stage is mature compounder — 5–6% revenue growth at $713 billion scale — with a low beta of 0.578 that makes it inappropriate for short-term momentum trading despite the recent 8.47% monthly rally. The dividend yield of 0.79% with a 34.3% payout ratio provides modest income but is not a primary reason to own the stock; the investment case rests on capital appreciation from share gains and margin recovery. Earnings visibility is high given the defensive grocery mix and consistent quarterly cadence, but the 43.48x PE means near-term multiple compression risk is elevated, so staggered entry on pullbacks toward $105–$110 is prudent. Short-term traders should note the well-defined $102.63 support and $135.16 resistance levels, but the low volatility and limited analyst upside make WMT a poor vehicle for short-term speculation.