HSBC Downgrades Walmart to Hold Amid Weak Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy WMT?
Source: CNBC
- Rating Downgrade: HSBC downgraded Walmart from buy to hold due to weaker future guidance and reduced momentum, although analyst Joe Thomas raised the price target from $122 to $131, implying only a 5% upside.
- Earnings Report: Walmart reported a fourth-quarter earnings and revenue beat, but its current-quarter earnings outlook fell short of Wall Street expectations, indicating uncertainty in future growth.
- E-commerce Growth: Despite a 24% global growth in e-commerce, Thomas found Walmart's 2026 outlook surprisingly weak, which may reflect a conservative stance from the new management team.
- Market Performance: Walmart shares surged 28% over the past year and 12% this year, yet analysts noted that while the company is performing well, the valuation discount has largely disappeared, suggesting limited near-term momentum.
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Analyst Views on WMT
Wall Street analysts forecast WMT stock price to fall
26 Analyst Rating
25 Buy
1 Hold
0 Sell
Strong Buy
Current: 126.620
Low
119.00
Averages
125.75
High
136.00
Current: 126.620
Low
119.00
Averages
125.75
High
136.00
About WMT
Walmart Inc. is a technology-powered omnichannel retailer. The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce Websites and mobile applications, located throughout the United States (U.S.), Africa, Canada, Central America, Chile, China, India and Mexico. It operates in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Robust E-commerce Growth: Global eCommerce sales surged 24%, primarily driven by store-fulfilled pickup and delivery services, indicating Walmart's successful digital transformation and further solidifying its market position.
- Thriving Advertising Business: Walmart's global advertising revenue grew by 37%, with Walmart Connect in the U.S. up 41%, which not only enhances the company's revenue streams but also strengthens its competitive edge in the advertising market.
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- Thriving Advertising Business: Walmart's global advertising revenue grew by 37%, with Walmart Connect in the U.S. up 41%, which not only enhances the company's revenue streams but also strengthens its competitive edge in the advertising market.
- Cautious Future Outlook: The company projects net sales growth of 3.5% to 4.5% for FY27, below the market consensus of 5.01%, with adjusted EPS expected to be between $2.75 and $2.85, reflecting uncertainty regarding future economic conditions.
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- Valuation Attractiveness: With a forward P/E of just 14.6, well below the 10-year median of 22.4, Kimberly-Clark remains a 'bargain' despite rising valuations in the consumer staples sector, drawing attention from value investors.
- Acquisition Potential: The upcoming acquisition of Kenvue, expected to close in the second half of 2026, will expand Kimberly-Clark's product portfolio and deliver billions in annual synergies, potentially leading to earnings growth in the second year post-acquisition, enhancing long-term growth prospects.
- Strong Industry Position: As a 'Dividend King' that has raised its dividend for 54 consecutive years, Kimberly-Clark demonstrates robust financial stability and commitment to shareholders, making it an ideal choice for long-term investors despite facing growth slowdowns.
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- Rating Changes Overview: Top Wall Street analysts have adjusted their ratings on several companies, including upgrades, downgrades, and initiations, reflecting the latest market views and expectations for these firms.
- Investment Recommendation Analysis: While specific stock recommendations are not detailed in this article, changes in analyst ratings typically influence investor decisions, potentially leading to price fluctuations in the affected stocks.
- Market Reaction Expectations: The adjustments made by analysts may draw market attention to the related stocks, prompting investors to closely monitor these changes to seize investment opportunities.
- Source Information Note: This report is provided by Benzinga, highlighting the significance of analyst rating changes and suggesting investors visit the analyst ratings page for a more comprehensive view.
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- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, indicating a shift in market sentiment that could influence investor decisions.
- Upgrades and Downgrades: While specific upgrades and downgrades are not detailed, the overall rating changes may lead to short-term volatility in the affected stocks, prompting investors to stay alert.
- Market Reaction Expectations: Analyst rating adjustments typically trigger immediate market reactions, and investors should consider the potential impact of these changes on stock prices to make more informed investment choices.
- Information Access Channels: Investors can visit the analyst ratings page to obtain a comprehensive view of rating changes, thereby enhancing their understanding of market trends and individual stock performance.
See More
Walmart Analysts Upgrade Rating to Buy
- Analyst Rating Upgrade: Analysts have upgraded Walmart (WMT) to an average rating of 'Buy', indicating increased market confidence in its future performance, which may attract more investor interest.
- Price Target Set: The mean price target for Walmart is set at $135.08, reflecting optimistic expectations regarding the company's future profitability and market position, potentially driving the stock price higher.
- Market Reaction Anticipated: With the rating upgrade and price target increase, Walmart's stock price is expected to experience positive momentum, likely attracting more institutional investors and enhancing market liquidity.
- Long-Term Growth Potential: The analysts' 'Buy' rating and price target suggest that Walmart's long-term growth potential in the retail sector remains strong, particularly driven by e-commerce and new retail models, which could further increase its market share.
See More
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- Direct Sales Model: Bath & Body Works launches its first authorized brand storefront on Amazon, directly reaching consumers and leveraging Amazon's logistics network to enhance product accessibility, which is expected to significantly increase market share in online sales channels.
- Market Share Competition: According to Euromonitor, Amazon holds a 47% share of the U.S. beauty market, and Bath & Body Works' new strategy aims to strengthen brand competitiveness, particularly against Sephora's 9% market share.
- Innovative Growth Strategy: New CEO Daniel Heaf outlines a consumer-first growth plan focused on innovative products and brand revitalization to achieve sustainable profitability, with the Amazon partnership seen as the first milestone in this strategy.
- Lower Shopping Threshold: Bath & Body Works reduces its website's free shipping threshold from $100 to $50 to enhance consumer shopping experience, while also increasing competitiveness through Amazon's Prime eligibility, despite acknowledging the challenge of competing with Amazon's delivery speed.
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