TLDR
- Graham Capital trims Walmart stake by 32.4%, selling over 27K shares
- Q2 EPS of $0.68 missed $0.74 consensus, revenues at $169.34B below $174.02B forecast
- Analysts maintain Buy with price targets of $110–$115 despite profit headwinds
- Walmart raises FY2026 sales outlook, lifts EPS guidance to $2.52–$2.62
- Margins pressured by liability claims, tariffs, and merchandise mix
Walmart Inc. (NYSE: WMT) stock opened at $96.97 on Friday, with Graham Capital Management L.P. disclosing a 32.4% reduction in holdings during the first quarter. The fund now owns 56,641 shares valued at about $4.97 million after selling 27,107 shares. Other hedge funds also adjusted their positions, with Monument Capital Management boosting holdings by 94.2% and Mitsubishi UFJ Asset Management increasing its stake by 11.8%, underscoring continued institutional interest in the retail giant.
Q2 2026 Earnings: EPS Miss but Revenue Growth Holds
Walmart reported earnings per share (EPS) of $0.68 on August 21, 2025, falling short of the consensus estimate of $0.74. Revenue came in at $169.34 billion, below the $174.02 billion forecast, though up 4.8% year-over-year. Net margin stood at 3.08%, while return on equity reached 21.45%. Walmart guided Q3 EPS at $0.58–$0.60 and FY2026 EPS at $2.52–$2.62, aligning with analyst expectations.
Analysts Stay Bullish Despite Margin Pressures
Despite the earnings miss, Wall Street remains optimistic. Goldman Sachs lifted its price target to $114, while Evercore ISI and Guggenheim reiterated Outperform ratings with targets between $110 and $115. Consensus reflects a “Buy” rating with a $110.59 price target, supported by Walmart’s steady sales momentum.
Sales Growth vs. Profitability Challenges
Walmart raised its full-year sales growth outlook to 3.75%–4.75% and EPS guidance to $2.52–$2.62, but left operating income projections unchanged at 3.5%–5.5%. Margins remain constrained by rising liability claims, totaling $730 million year-to-date, along with tariffs and unfavorable merchandise mix.
Bright Spots: E-Commerce, Advertising, and Membership
E-commerce continues to be a growth driver, with improved marketplace penetration and delivery efficiencies. Advertising revenues surged nearly 50% globally, including 31% growth in Walmart Connect U.S., while membership income advanced 15%. These high-margin segments are expected to play a larger role in profitability recovery.
Performance Overview: WMT vs. S&P 500
- YTD Return: WMT 8.15% vs. S&P 500 9.84%
- 1-Year Return: WMT 28.14% vs. S&P 500 15.53%
- 3-Year Return: WMT 127.50% vs. S&P 500 60.28%
- 5-Year Return: WMT 122.31% vs. S&P 500 84.16%
Walmart has proven its ability to deliver consistent sales growth, even in challenging conditions. While rising expenses weigh on near-term profitability, strong e-commerce adoption, advertising growth, and resilient demand support analyst optimism for longer-term gains.
