TLDR
- Walmart stock dropped nearly 10% on Aug. 20 after its fiscal Q2 earnings report, its worst single-day drop in almost five years.
- Comparable sales growth slowed to 2.6% in the U.S., the lowest in years, missing prior quarter’s 4.1%.
- Despite the miss, Walmart beat EPS estimates ($0.81 vs $0.74) and raised its fiscal 2027 guidance.
- BTIG Research reissued a “Buy” rating with a $140 price target, implying around 32% upside from $105.83.
- The analyst consensus sits at “Moderate Buy” with an average price target of $131.88 across 39 analysts.
Walmart (WMT) stock opened at $105.83 on Thursday, still more than 7% below where it traded the day before its August 20 earnings report. That single-day drop of nearly 10% was the stock’s worst in almost five years.
The selloff was triggered by a slowdown in comparable sales growth. U.S. comp sales came in at 2.6%, down from 4.1% in the prior quarter and 4.6% a year ago. That’s the weakest reading in years, and it landed at a time when investors are already on edge about consumer spending power.
But the headline numbers told a different story. Walmart posted $0.81 in earnings per share, beating the $0.74 consensus. Revenue came in at $187.94 billion, up 5.9% year over year and above the $186.64 billion estimate. The company also raised its fiscal 2027 guidance for sales, operating income, and earnings.
As Gimme Credit’s Carol Levenson put it, if you stripped away the stock reaction and just read the results, you’d probably guess the stock went up.
Energy prices remain a headwind. The oil price spike is squeezing Walmart’s lower-income customer base while also pushing up the company’s own operating costs. Its third-quarter outlook also came in below expectations, adding to the near-term pressure.
Higher fuel costs and the ongoing Iran conflict are factors analysts are watching closely as potential overhangs for the stock in the months ahead.
Analysts Still Bullish
Despite the post-earnings drop, analyst sentiment has held up. BTIG Research reissued its “Buy” rating on Thursday with a $140 price target, implying around 32% upside from current levels. Tigress Financial has an even higher target of $155.
D.A. Davidson’s Michael Baker likes that Walmart is using tariff refunds to cut prices, which he sees as a driver of market share gains. He has a price target of $132. Citigroup lowered its target from $147 to $132 but kept its “Buy” rating. Sanford C. Bernstein reiterated “Outperform.”
Of 39 analysts covering the stock, 35 rate it Strong Buy or Buy. Four rate it Hold. The average price target sits at $131.88.
The stock now trades at under 33 times next year’s earnings, down from its five-year average of 35 times. Jefferies analyst Corey Tarlowe wrote that “the majority of the downside to EPS revisions is already baked in,” with consensus fiscal 2028 EPS sitting at $3.23.
Growing Revenue Streams
Beyond core retail, Walmart’s ancillary businesses are drawing attention. Walmart+ membership fees and its advertising segment both posted strong numbers in Q2, with Neuberger Berman’s John San Marco describing those results as “every bit as fantastic” as prior quarters.
Walmart also trades at a discount to Costco, a reversal from when the two names tracked each other more closely.
On the insider side, EVP Daniel Bartlett sold 3,950 shares on September 1 at $105.14 under a pre-arranged 10b5-1 plan. EVP Christopher Nicholas sold 2,900 shares on August 20 at $106.34, also under a 10b5-1 plan.
WMT’s 52-week range is $98.88 to $135.16, with a 50-day moving average of $110.45 and a 200-day moving average of $119.08.
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