Quick Summary
- Walmart shares plummeted approximately 10% on August 20 following its fiscal Q2 results, marking the steepest single-session decline in nearly half a decade.
- U.S. comparable store sales growth decelerated to 2.6%, representing the weakest performance in years and falling short of the previous quarter’s 4.1% gain.
- The retailer exceeded earnings per share forecasts ($0.81 versus $0.74 consensus) and upgraded its fiscal 2027 outlook despite the sales slowdown.
- BTIG Research maintained its “Buy” recommendation with a $140 price objective, suggesting approximately 32% potential upside from $105.83.
- Wall Street consensus reflects a “Moderate Buy” stance with an average price objective of $131.88 among 39 covering analysts.
Walmart (WMT) stock started trading Thursday at $105.83, remaining over 7% lower than its pre-earnings level from August 19. The nearly 10% single-day plunge represented the retailer’s most significant decline since 2020.
The sharp decline followed disappointing comparable sales figures. U.S. comp sales registered 2.6%, deteriorating from the prior quarter’s 4.1% and last year’s 4.6%. This marked the slowest growth rate in several years, emerging precisely when market participants are increasingly concerned about consumer purchasing power.
However, the broader financial picture painted a more positive narrative. The company delivered earnings per share of $0.81, surpassing analyst expectations of $0.74. Total revenue reached $187.94 billion, reflecting 5.9% year-over-year growth and exceeding the $186.64 billion projection. Management also elevated its fiscal 2027 projections for sales, operating income, and profitability.
According to Gimme Credit analyst Carol Levenson, examining the results independently from market reaction would logically suggest a positive stock movement.
Elevated energy costs continue creating challenges. Surging oil prices are pressuring Walmart’s core lower-income demographic while simultaneously inflating the retailer’s operational expenses. The company’s third-quarter guidance also disappointed expectations, contributing additional near-term concerns.
Escalating fuel expenses and geopolitical tensions involving Iran represent factors that analysts are monitoring as potential obstacles for share performance in coming months.
Wall Street Maintains Positive Outlook
Notwithstanding the post-earnings decline, analyst confidence remains intact. BTIG Research reaffirmed its “Buy” recommendation Thursday with a $140 price objective, indicating roughly 32% appreciation potential from present levels. Tigress Financial projects an even more optimistic $155 target.
D.A. Davidson analyst Michael Baker highlights Walmart‘s strategic use of tariff rebates for price reductions, viewing this as a catalyst for expanding market share. His price target stands at $132. Citigroup reduced its target from $147 to $132 while maintaining its “Buy” recommendation. Sanford C. Bernstein reaffirmed “Outperform.”
Among 39 analysts tracking the stock, 35 assign Strong Buy or Buy ratings. Four recommend Hold. The consensus price target stands at $131.88.
Shares currently trade below 33 times forward earnings estimates, down from the five-year average multiple of 35 times. Jefferies analyst Corey Tarlowe noted that “the bulk of downward EPS adjustments is already reflected in valuations,” with consensus fiscal 2028 EPS projections at $3.23.
Diversified Revenue Channels
Outside traditional retail operations, Walmart’s complementary business units are attracting investor interest. Walmart+ subscription revenue and the advertising division both delivered robust Q2 performance, with Neuberger Berman analyst John San Marco characterizing those outcomes as “every bit as fantastic” as previous quarters.
The retailer also commands a valuation discount relative to Costco, representing a shift from historical periods when both stocks maintained closer parity.
Regarding insider transactions, EVP Daniel Bartlett divested 3,950 shares on September 1 at $105.14 through a predetermined 10b5-1 trading arrangement. EVP Christopher Nicholas sold 2,900 shares on August 20 at $106.34, also via a 10b5-1 plan.
WMT’s 52-week trading range spans $98.88 to $135.16, with its 50-day moving average positioned at $110.45 and 200-day moving average at $119.08.
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