Walmart Inc. Common Stock
WMT
$109.08
+1.80%
Walmart Inc. is the world's largest retailer, operating over 10,700 stores globally — including roughly 4,600 Walmart US locations and about 600 Sam's Club warehouses — while serving approximately 270 million customers weekly across its Walmart US, Walmart International, and Sam's Club reporting segments. The company's competitive identity rests on unmatched scale, a grocery-led traffic engine (nearly 60% of its $486 billion in fiscal 2026 US revenue), and an accelerating e-commerce, advertising, and marketplace ecosystem that is gradually shifting its profit mix toward higher-margin streams. The current investor narrative is dominated by a sharp debate over consumer health: US comparable sales missed expectations in the August 2026 quarter, triggering a roughly 9% post-earnings drop and pushing the stock out of the $1 trillion market-cap club, even as management and bulls point to strong e-commerce and advertising growth as durable long-term drivers. At the same time, tariff dynamics — including $100 billion-plus in IEEPA refunds received by consumer giants and the threat of new Section 301 tariffs — add a layer of margin and inflation uncertainty that keeps the stock's near-term outlook contested.…
WMT
Walmart Inc. Common Stock
$109.08
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Investment Opinion: Should I buy WMT Today?
The synthesized recommendation is Hold. WMT's analyst consensus is 'buy' with a mean of 1.53 and an average target price of $127.43, implying +18.9% upside, but the stock's premium valuation (43.5x trailing PE, 33.2x forward PE), decelerating comparable sales, and severe relative underperformance (-30.71% vs. SPY over 6 months) suggest the risk/reward is balanced rather than compelling. The core thesis is that WMT remains a high-quality defensive compounder with strong e-commerce and advertising optionality, but the current multiple already prices in a successful transformation, leaving limited margin of safety.
Supporting evidence for a Hold includes: (1) revenue growth of 7.33% YoY in the latest quarter, with Walmart US at $117.17 billion, International at $35.11 billion, and Sam's Club at $23.41 billion; (2) profitability is stable but thin, with net margin of 3.07%, gross margin of 25.14%, and operating margin of 4.18%; (3) TTM free cash flow of $12.55 billion, though the latest quarter was negative at -$1.95 billion; and (4) the implied upside to the average analyst target of $127.43 is +18.9%, but the low target of $81.00 implies -24.4% downside. The dividend yield of 0.79% with a payout ratio of 34.3% offers little income support, and the PEG ratio of 3.29 signals the market is paying a steep price for mid-single-digit growth.
The biggest risks that could invalidate the thesis are: (1) a sustained consumer slowdown driving comparable sales negative and compressing margins; (2) further multiple compression if the market re-rates WMT toward the sector's low-to-mid 20s PE; and (3) tariff-related cost inflation eroding already-thin margins. The rating would upgrade to Buy if the stock pulls back toward the 52-week low of $98.88 (implying a forward PE closer to 28x) or if comparable sales reaccelerate and high-margin streams demonstrate tangible margin expansion. It would downgrade to Sell if revenue growth decelerates below 5% or if free cash flow remains negative for multiple quarters. Relative to its own history (20-27x PE in 2022-2024) and peers, WMT is overvalued, and the recent de-rating from $135 to $107 is the market beginning to question the premium.
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WMT 12-Month Price Forecast
WMT presents a balanced risk/reward at current levels, with the bear case currently having stronger near-term evidence due to the comparable-sales miss, negative free cash flow, and premium valuation. However, the long-term bull case remains intact, supported by solid revenue growth, high-margin e-commerce and advertising optionality, and a defensive low-beta profile. The stock is likely to trade in a range between $115 and $130 over the next 12 months as the market digests consumer health and tariff dynamics. I would upgrade to bullish if US comparable sales reaccelerate and gross margin expands above 25.5%, or downgrade to bearish if comparable sales turn negative and free cash flow remains negative for multiple quarters. The key tension is whether the premium multiple can be justified by accelerating high-margin streams or whether it will compress toward the sector average.
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 $127.42 and implied upside of +16.8% versus the current price.
Average Target
$127.42
0 analysts
Implied Upside
+16.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$81 - $155
Analyst target range
Coverage is deep and institutional, with 40 analysts following Walmart and a consensus recommendation of "buy" (recommendation mean of 1.53, where 1.0 is a strong buy). The average price target of $127.43 implies roughly +18.9% upside from the current price of $107.15, and consensus EPS estimates cluster tightly at $4.23 (range $4.15-$4.27) on estimated revenue of $890.45 billion — a constructive setup that suggests the sell-side views the recent pullback as an opportunity rather than a structural breakdown. The consensus leans bullish, consistent with the recent institutional ratings flow showing predominantly Buy/Outperform reiterations from BTIG, UBS, RBC Capital, BNP Paribas, Piper Sandler, and Wolfe Research through May-June 2026, with only Freedom Broker downgrading to Hold from Sell. The target range is wide — from a low of $81.00 to a high of $155.00 — a spread of $74, or roughly 69% of the current price, which signals meaningful disagreement about the consumer outlook and the durability of Walmart's margin story. The high target of $155 assumes successful multiple expansion driven by accelerating e-commerce, advertising, and marketplace profitability plus a consumer rebound, while the low target of $81 prices in continued comparable-sales deterioration, margin compression from tariffs, and a broader consumer-spending recession. Notably, the low target sits 24% below the current price and 18% below the 52-week low of $98.88, implying some analysts see a genuine downside scenario; the fact that the average target ($127.43) is above the 52-week high ($135.16 is only modestly higher) suggests the consensus expects a recovery but not a dramatic re-rating. The wide dispersion, combined with the stock's recent underperformance and the August comparable-sales miss, indicates conviction is weaker than the "buy" headline implies, and near-term estimate revisions — not target prices — will be the key signal to watch.
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Bulls vs Bears: WMT Investment Factors
The bear case currently has stronger evidence, driven by the August comparable-sales miss, severe relative underperformance (-30.71% vs. SPY over 6 months), and a premium valuation (43.5x trailing PE) that is difficult to defend amid decelerating growth. The bull case rests on analyst consensus (18.9% upside to $127.43), solid 7.3% revenue growth, and the long-term potential of high-margin e-commerce and advertising. The single most important tension is whether the consumer slowdown is temporary or structural: if US comparable sales stabilize and high-margin streams accelerate, the premium multiple can be justified; if the slowdown persists, further multiple compression toward the sector average could drive the stock toward the analyst low target of $81. The stock's low beta (0.595) and defensive characteristics provide some downside cushion, but the current negative alpha suggests the market is repricing WMT's growth narrative.
Bullish
- Analyst consensus sees 18.9% upside: 40 analysts cover WMT with a consensus 'buy' rating (mean 1.53) and an average price target of $127.43, implying +18.9% upside from $107.15. The high target of $155 suggests the sell-side expects a full recovery and multiple expansion, while the low target of $81 is 24% below current price, indicating a wide but positively skewed distribution.
- Revenue growth remains solid at 7.3% YoY: Latest quarterly revenue of $177.75 billion grew 7.33% year-over-year, with Walmart US contributing $117.17 billion (68% of sales), International $35.11 billion, and Sam's Club $23.41 billion. This top-line momentum, while decelerating, still outpaces typical retail growth and supports the thesis that the August comparable-sales miss is a temporary consumer pause rather than a structural breakdown.
- High-margin e-commerce and advertising growth: Management and bulls point to accelerating e-commerce, advertising, and marketplace profitability as durable long-term drivers that are gradually shifting the profit mix toward higher-margin streams. The recent news flow highlights that despite the 9% post-earnings drop, these high-margin businesses offer long-term promise and could justify the premium multiple over time.
- Defensive low-beta profile with 0.595 beta: WMT's beta of 0.595 means it typically moves only about 60% as much as the market, offering lower volatility than the broader market. For income and defensive investors, this lower correlation to market swings provides portfolio stability, even though the stock is currently delivering negative alpha due to company-specific selling pressure.
Bearish
- Premium valuation at 43.5x trailing PE: WMT trades at a trailing PE of 43.48x and forward PE of 33.17x, roughly 80-100% above the sector's historical low-to-mid 20s multiple. The PEG ratio of 3.29 signals investors are paying a steep price for mid-single-digit top-line growth, leaving the stock vulnerable to multiple compression if growth disappoints.
- Comparable sales miss triggered 9% drop: US comparable sales missed expectations in the August 2026 quarter, causing a roughly 9% post-earnings drop and pushing WMT out of the $1 trillion market-cap club. This miss signals a slowdown in consumer spending, a critical risk given that Walmart US represents roughly 68% of total sales.
- Negative free cash flow in latest quarter: The most recent quarter posted negative free cash flow of -$1.95 billion as capital expenditure of $6.68 billion outpaced operating cash flow of $4.74 billion. With TTM free cash flow of $12.55 billion and a current ratio of 0.79, the company relies on supplier financing and seasonal swings, leaving little cushion if consumer demand weakens further.
- Severe relative underperformance vs. SPY: WMT has underperformed SPY by -6.58% over 1 month, -14.52% over 3 months, and -30.71% over 6 months, despite a low beta of 0.595. This magnitude of underperformance for a defensive name signals company-specific selling pressure and active abandonment by institutional investors.
WMT Technical Analysis
Walmart is in a clear intermediate-term downtrend despite a modestly positive 1-year return of 4.38%, with the stock at $107.15 sitting only about 20.7% above its 52-week low of $98.88 and roughly 20.7% below its 52-week high of $135.16 — positioning it near the lower third of its annual range. That positioning is characteristic of a broken momentum leader rather than a value opportunity: the stock has surrendered most of its 1-year gains, with a max drawdown of -23.52% from peak, and the 6-month change of -15.31% confirms sustained distribution rather than a brief shakeout. The 52-week range placement implies sellers remain in control and rallies are being sold until proven otherwise. Recent momentum is decisively negative and worsening: the 1-month change of -7.64% and 3-month change of -11.48% show the decline is accelerating rather than stabilizing, and the 1-year gain of 4.38% is now entirely front-loaded, meaning the trailing-year return masks a deteriorating second half. Relative strength is deeply negative across every window — -6.58% versus SPY over 1 month, -14.52% over 3 months, and -30.71% over 6 months — indicating Walmart is not merely falling but is being actively abandoned relative to a rising market (SPY +16.22% over 1 year). The stock's beta of 0.595 means it typically moves only about 60% as much as the market, so this magnitude of underperformance is highly unusual for a defensive name and signals company-specific selling pressure, likely tied to the August comparable-sales miss. Key levels are well defined: the 52-week low at $98.88 is the critical support zone, and a breakdown below it would confirm a full trend reversal with the next leg lower; resistance sits at the $135.16 high, but the more immediate battleground is the $115-$120 area where the stock repeatedly failed in July and August. With a short ratio of 3.1 days-to-cover, short interest is moderate rather than extreme, so there is no obvious squeeze catalyst; combined with the low beta of 0.595, the stock offers lower volatility than the market but is currently delivering negative alpha, making position sizing a question of opportunity cost rather than tail risk.
Beta
0.59
0.59x market volatility
Max Drawdown
-23.5%
Largest decline past year
52-Week Range
$99-$135
Price range past year
Annual Return
+5.4%
Cumulative gain past year
| Period | WMT Return | S&P 500 |
|---|---|---|
| 1m | -5.4% | -2.0% |
| 3m | -9.9% | +1.4% |
| 6m | -10.6% | +15.0% |
| 1y | +5.4% | +15.7% |
| ytd | -3.3% | +11.6% |
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WMT Fundamental Analysis
Walmart's revenue trajectory remains solidly positive but is showing signs of deceleration at the margin: the most recent quarter (ending 2026-04-30) delivered revenue of $177.75 billion with 7.33% YoY growth, building on $190.66 billion in the prior Q4 and $179.50 billion in Q3, with segment data showing Walmart US at $117.17 billion, International at $35.11 billion, and Sam's Club at $23.41 billion. The YoY growth of 7.33% compares favorably to the year-ago quarter's $165.61 billion base, but the August 2026 comparable-sales miss reported in the news flow suggests the top-line momentum is cooling as consumer spending slows — a critical risk given that Walmart US represents roughly 68% of sales. The investment case increasingly hinges on whether high-margin e-commerce and advertising growth can offset softer core retail traffic, and the market's sharp negative reaction suggests investors are not yet convinced. Profitability is stable but thin, as expected for discount retail: net income in the latest quarter was $5.65 billion on a net margin of just 3.07%, with gross margin of 25.14% and operating margin of 4.18%. Gross margin has been remarkably consistent — 25.14%, 24.67%, 24.95%, and 25.16% across the last four quarters — indicating no meaningful margin expansion despite the higher-margin mix shift narrative, while net margin has oscillated between 2.22% and 3.96% on seasonal and one-time items. The Q4 net margin dip to 2.22% (net income $4.24 billion) versus Q2's 3.96% ($7.03 billion) highlights how sensitive Walmart's razor-thin profitability is to expense timing and other income/expense swings. The balance sheet is sound but not fortress-like: debt-to-equity of 0.67 is moderate for a mega-cap retailer, ROE of 21.98% is strong and flattered by a high equity multiplier, and ROA of 6.41% reflects the capital-intensive store base. The critical watch item is cash flow — TTM free cash flow is $12.55 billion, but the most recent quarter posted negative free cash flow of -$1.95 billion as capital expenditure of $6.68 billion outpaced operating cash flow of $4.74 billion, and the current ratio of 0.79 signals a working-capital position that relies on supplier financing rather than balance-sheet liquidity. With dividends paid of $1.97 billion and buybacks of $2.08 billion in the quarter, Walmart is returning cash faster than it generates it in seasonal troughs, which is manageable given its scale but leaves little cushion if consumer demand weakens further.
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?
Because Walmart is solidly profitable — trailing net income is positive and the latest quarter posted $5.65 billion — the PE ratio is the appropriate primary metric, and it reveals a stock that is expensive on both an absolute and relative basis: the trailing PE is 43.48x while the forward PE is 33.17x, a meaningful gap that implies the market expects roughly 24% earnings growth to bring the multiple down. That forward multiple is still rich for a low-growth retailer, and the PEG ratio of 3.29 confirms investors are paying a steep price for growth that is only mid-single-digit on the top line. The trailing PE of 43.48x is also inflated by a depressed trailing EPS base, making the forward figure the more informative anchor. Against the broader Consumer Defensive / Discount Stores peer set, Walmart trades at a substantial premium: its PS ratio of 1.33x and EV/Sales of 1.24x are elevated for a grocery-heavy retailer, while the EV/EBITDA of 21.68x and PB ratio of 9.55x sit well above what the sector typically commands. The premium is partly justified by Walmart's scale, 21.98% ROE, and emerging high-margin advertising/marketplace businesses, but the 43.48x trailing PE versus a sector that historically trades in the low-to-mid 20s represents a premium of roughly 80-100%, which is difficult to defend when comparable sales are missing expectations. The dividend yield of just 0.79% with a payout ratio of 34.3% offers little income support to justify the multiple. Historically, Walmart's own valuation band tells a cautionary story: the current trailing PE of 43.48x is near the top of its multi-year range, well above the 20-27x it traded at through 2022-2024 (e.g., 20.25x in Q4 FY2024 and 27.09x in Q4 FY2022), while the PB ratio of 9.55x dwarfs the 4.6-5.9x range seen in 2022-2023. This suggests the market has spent the past two years pricing in an optimistic AI/e-commerce/advertising transformation narrative, and the recent de-rating from the $135 high toward $107 is the market beginning to question that premium — leaving the stock vulnerable to further multiple compression if growth disappoints.
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 are significant given WMT's razor-thin margins and working-capital dynamics. Net margin is just 3.07% in the latest quarter, with gross margin stagnant at 25.14% despite the higher-margin mix-shift narrative, meaning any cost inflation or tariff pressure could quickly erode profitability. The most recent quarter posted negative free cash flow of -$1.95 billion as capex of $6.68 billion outpaced operating cash flow of $4.74 billion, and the current ratio of 0.79 signals reliance on supplier financing. With dividends of $1.97 billion and buybacks of $2.08 billion in the quarter, WMT is returning cash faster than it generates in seasonal troughs, leaving little cushion if consumer demand weakens further. Additionally, revenue concentration in Walmart US (68% of sales) and grocery (nearly 60% of US revenue) exposes the company to a single-geography and single-category slowdown.
Market and competitive risks center on valuation compression and consumer cyclicality. WMT trades at a trailing PE of 43.48x and forward PE of 33.17x, roughly 80-100% above the sector's historical low-to-mid 20s multiple, leaving it vulnerable to de-rating if growth disappoints. The stock's beta of 0.595 means it typically moves only 60% as much as the market, yet it has underperformed SPY by -30.71% over 6 months, indicating company-specific selling pressure rather than broad market weakness. Competitive threats from Target (which doubled quarterly profit to $1.88 billion), Amazon, and other retailers could pressure market share, while tariff dynamics — including $100 billion-plus in IEEPA refunds and new Section 301 tariffs — add margin and inflation uncertainty. The August comparable-sales miss and the resulting 9% drop highlight how sensitive the stock is to consumer spending signals.
In a worst-case scenario, a sustained consumer recession would drive US comparable sales negative, compress margins further, and force analysts to cut estimates, triggering multiple compression toward the sector average. The stock could retest its 52-week low of $98.88 (a -7.7% decline from $107.15) and potentially approach the analyst low target of $81.00, which is 24% below the current price and 18% below the 52-week low. From the current price of $107.15, a decline to $81 would represent a loss of approximately -24.4%, while a drop to the 52-week low of $98.88 would be a -7.7% loss. The max drawdown of -23.52% from the 52-week high of $135.16 already demonstrates the stock's capacity for sharp declines, and a breakdown below $98.88 would confirm a full trend reversal with the next leg lower.
FAQ
The key risks ranked by severity are: (1) Consumer slowdown risk — US comparable sales missed expectations in August 2026, triggering a 9% drop, and a sustained slowdown could drive sales negative and compress margins, given Walmart US represents 68% of total sales. (2) Valuation compression risk — at 43.5x trailing PE, WMT is vulnerable to de-rating toward the sector's low-to-mid 20s multiple, which could drive the stock toward the analyst low target of $81.00 (-24.4% downside). (3) Margin and tariff risk — gross margin has been stagnant at ~25% despite the mix-shift narrative, and new Section 301 tariffs could reignite inflation and further pressure already-thin margins. (4) Cash flow risk — the latest quarter posted negative free cash flow of -$1.95 billion, and the current ratio of 0.79 signals reliance on supplier financing, leaving little cushion if consumer demand weakens further.
The 12-month forecast is based on three scenarios: Bull case (25% probability) targets $135-$155, assuming comparable sales reaccelerate and high-margin streams drive margin expansion, with catalysts including a Q3 earnings beat and Fed rate cuts. Base case (50% probability) targets $115-$130, assuming consumer spending stabilizes, revenue grows mid-single digits, and the stock trades toward the analyst average target of $127.43. Bear case (25% probability) targets $81-$99, assuming a consumer recession, negative comparable sales, and multiple compression toward the sector average, with the stock retesting the 52-week low of $98.88 and potentially the analyst low target of $81.00. The base case is most likely, with the key assumption being that US comparable sales recover to 2-3% growth and gross margin holds around 25%.
WMT is overvalued relative to both its own history and its peers. The trailing PE of 43.48x and forward PE of 33.17x are roughly 80-100% above the Consumer Defensive / Discount Stores sector's historical low-to-mid 20s multiple. The PS ratio of 1.33x and EV/EBITDA of 21.68x are also elevated for a grocery-heavy retailer, while the PB ratio of 9.55x dwarfs the 4.6-5.9x range seen in 2022-2023. Historically, WMT traded at 20-27x PE through 2022-2024, so the current multiple represents a significant premium. The market is pricing in a successful transformation toward higher-margin e-commerce, advertising, and marketplace businesses, but with revenue growth at 7.33% and net margin at just 3.07%, the valuation implies expectations that may be difficult to meet. The dividend yield of 0.79% offers little income support to justify the multiple.
WMT is a Hold at current levels, not a compelling Buy, given the balanced risk/reward. The stock trades at a premium valuation (43.5x trailing PE, 33.2x forward PE) with a PEG ratio of 3.29, while US comparable sales missed expectations in August 2026 and free cash flow turned negative at -$1.95 billion in the latest quarter. Analyst consensus is 'buy' with an average target of $127.43, implying +18.9% upside, but the low target of $81.00 implies -24.4% downside, reflecting wide disagreement. For long-term, defensive investors with a 3-5 year horizon, WMT's scale, 21.98% ROE, and e-commerce optionality make it a reasonable core holding, but the current entry point lacks a margin of safety. A better entry would be near the 52-week low of $98.88, which would imply a more reasonable forward PE closer to 28x.
WMT is more suitable for long-term investment (minimum 3-5 years) than short-term trading, given its low beta of 0.595, defensive characteristics, and the time needed for the e-commerce and advertising transformation to materially impact margins. The stock's recent volatility — including a -23.52% max drawdown and -30.71% relative underperformance vs. SPY over 6 months — makes short-term trading risky, as momentum is currently negative and rallies have been sold. The dividend yield of 0.79% with a payout ratio of 34.3% provides modest income but is not a primary reason to hold. For short-term traders, the key levels to watch are support at $98.88 (52-week low) and resistance at $115-$120, but the risk/reward favors waiting for a better entry point. Long-term investors should focus on whether high-margin streams can drive gross margin above 25.5% and free cash flow back to positive on a TTM basis.
