JPMorgan Analyst Maintains Overweight Rating on Walmart
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy WMT?
Source: Benzinga
- Solid Performance: Walmart's fourth-quarter results demonstrated 'solid fundamentals,' although operating income was slightly below expectations, indicating a high performance bar that may impact short-term stock performance.
- Sales Growth: U.S. comparable sales increased by 4.6% year-over-year, surpassing analyst consensus estimates of 4.3%, with strong grocery sales indicating market share gains across various income levels.
- Margin Improvement: Walmart's enterprise gross margin rose by 13 basis points year-over-year to 24.0%, driven by better inventory management and an improved business mix, with analysts optimistic about continued incremental margin improvements.
- Stock Performance: Walmart's stock rose 0.5% to $127.20 on Thursday, with a year-to-date increase of 12.8%, reflecting market confidence in its long-term growth potential.
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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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- Strong Earnings Report: Walmart's Q4 non-GAAP EPS of $0.74 exceeded expectations by $0.01, with revenue reaching $190.7 billion, a 5.6% year-over-year increase that surpassed market expectations by $2.38 billion, demonstrating the company's resilience amid economic challenges.
- 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.
- 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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- Digital Advertising Growth: Walmart's digital business grew by 27% in the U.S. in the fourth quarter and has posted double-digit percentage gains for 15 consecutive quarters, indicating strong performance in e-commerce and a focus on higher-margin businesses, despite losing its market leadership.
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- Walmart Earnings: Walmart reported upbeat fourth-quarter results with adjusted earnings per share of 74 cents, exceeding the expected 73 cents, but its fiscal 2027 outlook fell short, projecting earnings between $2.75 and $2.85, below the consensus estimate of $2.96.
- Sales Growth: Walmart's sales reached $190.70 billion, a 5.6% year-over-year increase, surpassing the analyst consensus of $190.43 billion, demonstrating the company's strong performance in the retail market.
- Energy Stocks Rise: Despite the overall market decline, energy stocks gained 1.1%, reflecting investor confidence in the sector, likely driven by oil prices rising 2.1% to $66.53.
See More
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- Digital Transformation Success: Walmart's digital business grew by 27% in the U.S. during the fourth quarter, achieving double-digit growth for 15 consecutive quarters, demonstrating its ability to leverage over 4,600 stores and 600 Sam's Club locations while chasing Amazon.
- AI Strategy Implementation: Walmart's partnerships with OpenAI and Google to launch the AI shopping assistant Sparky have resulted in a 35% increase in average order value for users, indicating that its investments in AI are enhancing customer experience and operational efficiency.
- Amazon's AI Investment Plans: Amazon plans to spend up to $200 billion on AI initiatives in 2023, primarily for data centers and networking equipment, although skepticism from the market has led to a decline of over $450 billion in its market value in the short term.
See More
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- Significant Revenue Growth: Walmart reported a 4.9% increase in revenue for Q4 2026 in constant currency, with eCommerce soaring by 24%, demonstrating the company's successful digital transformation and solidifying its market position.
- Strong Advertising Performance: Global advertising revenue surged by 37%, with Walmart Connect in the U.S. growing by 41%, not only enhancing revenue streams but also indicating the company's increasing competitiveness in the advertising sector.
- Share Repurchase Program: The Board authorized a $30 billion share repurchase program, the largest to date, aimed at enhancing shareholder value and reflecting management's confidence in future performance.
- Optimistic Outlook: Walmart anticipates sales growth of 3.5% to 4.5% and operating income growth of 6% to 8% for FY27, indicating sustained momentum despite uncertainties in the market environment.
See More
Walmart Q4 Earnings Beat Expectations
- Strong Earnings Report: Walmart's Q4 non-GAAP EPS of $0.74 exceeded expectations by $0.01, with revenue reaching $190.7 billion, a 5.6% year-over-year increase that surpassed market expectations by $2.38 billion, demonstrating the company's resilience amid economic challenges.
- 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.
- 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.
See More
Investors Misinterpret Walmart's Guidance Amid Earnings Season
- Walmart Guidance Misinterpretation: Many investors reacted to Walmart's 2026 estimate by selling shares in premarket trading, causing a few percentage points drop, despite the stock recovering by the opening bell, highlighting ignorance of management's guidance preferences.
- Carvana's Stock Volatility: Following Carvana's quarterly earnings report, the stock plummeted by $60, over a 16% decline, even though analysis indicated that profitability per vehicle remained strong with advertising costs rising by less than $15, showcasing an overreaction to short-term fluctuations.
- DoorDash Stock Rally: During the analyst call, CEO confirmed that the acquired Deliveroo is growing rapidly while maintaining profitability, leading to a 10% surge in stock price early in the day, settling at a 4% increase by midday, reflecting market confidence in future growth.
- Trading Strategy Warning: While short-term trading can yield profits, the article emphasizes the importance of focusing on long-term holdings and fundamental analysis to avoid making poor decisions based on market sentiment fluctuations.
See More
Amazon Surpasses Walmart as Top Revenue Company for First Time
- Revenue Comparison: Amazon achieved $716.9 billion in revenue for the latest fiscal year, surpassing Walmart's $713.2 billion for the first time, marking a significant shift in the retail landscape and showcasing Amazon's success in diversifying its revenue streams.
- Digital Advertising Growth: Walmart's digital business grew by 27% in the U.S. in the fourth quarter and has posted double-digit percentage gains for 15 consecutive quarters, indicating strong performance in e-commerce and a focus on higher-margin businesses, despite losing its market leadership.
- AI Strategic Initiatives: Walmart's partnerships with OpenAI and Google to launch the AI shopping assistant Sparky enhance customer experience, with users reporting a 35% higher average order value, highlighting the potential and importance of AI in retail.
- Amazon's AI Investments: Amazon plans to spend up to $200 billion on AI infrastructure in 2023, and despite market skepticism regarding its capital expenditures, its AI assistant Rufus has generated nearly $12 billion in incremental annualized sales, demonstrating its strong commitment to AI development.
See More
U.S. Stocks Close Lower, Dow Jones Falls Over 300 Points
- Market Performance: U.S. stocks closed lower on Thursday, with the Dow Jones index dropping over 300 points, a decline of 0.64% to 49,346.38, indicating investor concerns about the economic outlook.
- Walmart Earnings: Walmart reported upbeat fourth-quarter results with adjusted earnings per share of 74 cents, exceeding the expected 73 cents, but its fiscal 2027 outlook fell short, projecting earnings between $2.75 and $2.85, below the consensus estimate of $2.96.
- Sales Growth: Walmart's sales reached $190.70 billion, a 5.6% year-over-year increase, surpassing the analyst consensus of $190.43 billion, demonstrating the company's strong performance in the retail market.
- Energy Stocks Rise: Despite the overall market decline, energy stocks gained 1.1%, reflecting investor confidence in the sector, likely driven by oil prices rising 2.1% to $66.53.
See More
Amazon Surpasses Walmart as Revenue Leader
- Revenue Ranking Shift: Amazon has surpassed Walmart for the first time with an annual revenue of $716.9 billion compared to Walmart's $713.2 billion, highlighting intensified competition in the retail sector amid rapidly changing consumer preferences.
- Digital Transformation Success: Walmart's digital business grew by 27% in the U.S. during the fourth quarter, achieving double-digit growth for 15 consecutive quarters, demonstrating its ability to leverage over 4,600 stores and 600 Sam's Club locations while chasing Amazon.
- AI Strategy Implementation: Walmart's partnerships with OpenAI and Google to launch the AI shopping assistant Sparky have resulted in a 35% increase in average order value for users, indicating that its investments in AI are enhancing customer experience and operational efficiency.
- Amazon's AI Investment Plans: Amazon plans to spend up to $200 billion on AI initiatives in 2023, primarily for data centers and networking equipment, although skepticism from the market has led to a decline of over $450 billion in its market value in the short term.
See More
Walmart Q4 2026 Earnings Call Insights Highlight Strong Growth and Strategic Focus
- Significant Revenue Growth: Walmart reported a 4.9% increase in revenue for Q4 2026 in constant currency, with eCommerce soaring by 24%, demonstrating the company's successful digital transformation and solidifying its market position.
- Strong Advertising Performance: Global advertising revenue surged by 37%, with Walmart Connect in the U.S. growing by 41%, not only enhancing revenue streams but also indicating the company's increasing competitiveness in the advertising sector.
- Share Repurchase Program: The Board authorized a $30 billion share repurchase program, the largest to date, aimed at enhancing shareholder value and reflecting management's confidence in future performance.
- Optimistic Outlook: Walmart anticipates sales growth of 3.5% to 4.5% and operating income growth of 6% to 8% for FY27, indicating sustained momentum despite uncertainties in the market environment.
See More
