Walmart's Cautious Outlook Amid Strong Consumer Resilience
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy WMT?
Source: stocktwits
- Consumer Resilience Analysis: CEO John Furner noted that while U.S. consumer spending is becoming more cautious, overall spending remains resilient, particularly among households earning over $100,000, which accounted for most of the market share gains.
- Market Reaction: Walmart's annual forecasts fell short of expectations, resulting in a 1.4% drop in stock price; however, Wall Street analysts believe the retail giant may surprise investors given the low expectations, indicating confidence in its future performance.
- Investor Sentiment Shift: According to Stocktwits data, investor sentiment on Walmart shifted from 'bullish' to 'extremely bullish', reflecting increased confidence in its stock, despite some users predicting a potential drop to $110.
- Long-term Investment Returns: Nancy Tengler, portfolio manager of the TGLR ETF, stated that Walmart's valuation is healthy, with a 670% increase in stock price over the past decade, showcasing its success in pivoting to new technologies, although some recent profit-taking occurred.
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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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- Consumer Resilience Analysis: CEO John Furner noted that while U.S. consumer spending is becoming more cautious, overall spending remains resilient, particularly among households earning over $100,000, which accounted for most of the market share gains.
- Market Reaction: Walmart's annual forecasts fell short of expectations, resulting in a 1.4% drop in stock price; however, Wall Street analysts believe the retail giant may surprise investors given the low expectations, indicating confidence in its future performance.
- Investor Sentiment Shift: According to Stocktwits data, investor sentiment on Walmart shifted from 'bullish' to 'extremely bullish', reflecting increased confidence in its stock, despite some users predicting a potential drop to $110.
- Long-term Investment Returns: Nancy Tengler, portfolio manager of the TGLR ETF, stated that Walmart's valuation is healthy, with a 670% increase in stock price over the past decade, showcasing its success in pivoting to new technologies, although some recent profit-taking occurred.
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- Rapid Membership Fee Growth: In the first quarter of fiscal 2025, Costco's membership fees increased by 14% year-over-year, indicating the company's success in maintaining customer loyalty and diversifying revenue streams, which further solidifies its market position.
- Outstanding E-commerce Performance: Costco's digital sales surged by 34.4% in January, and even after adjusting for gasoline and foreign exchange, the growth remained at 33.1%, showcasing the company's strong competitiveness in the e-commerce sector and alleviating concerns about potential threats from Amazon.
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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.
See More
Amazon Surpasses Walmart to Top Fortune 500 for First Time in 13 Years
- Fortune 500 Ranking: Amazon has overtaken Walmart to secure the top position in the Fortune 500 list for the first time, with a reported revenue of $716.9 billion, indicating strong performance in the retail market.
- E-commerce and Cloud Computing Synergy: Amazon's AWS division reported $45.6 billion in operating income in 2025, contributing over half of the company's operating profit despite accounting for less than 20% of total revenue, thus funding new product development.
- Walmart's Transformation Strategy: In the latest quarter, Walmart's U.S. e-commerce sales grew by 27% year-on-year, with global online sales up 24%, and its partnership with OpenAI to enhance AI shopping experiences demonstrates its commitment to adapting to market changes.
- Stock Performance Comparison: Year-to-date, Walmart's stock has climbed 10.74%, while Amazon's stock has declined by 9.55%, reflecting market reactions to the differing strategies of the two companies, with Walmart achieving a historic $1 trillion valuation in February.
See More
U.S. Stocks Decline as Fear Index Rises, Market Sentiment Weakens
- Fear Index Rises: The CNN Money Fear & Greed Index registered at 38.5 on Thursday, remaining in the 'Fear' zone and slightly down from 39, indicating heightened market anxiety that could lead to increased risk aversion among investors.
- Stock Market Weakness: The Dow Jones fell over 250 points, closing at 49,395.16, while the S&P 500 dropped 0.28% to 6,861.89, and the Nasdaq Composite declined 0.31% to 22,682.73, reflecting investor concerns over potential military intervention in Iran.
- Widening Trade Deficit: The U.S. trade deficit expanded to $70.3 billion in December from $53 billion, significantly exceeding market expectations of a $55.5 billion gap, suggesting pressures in the international trade environment that could negatively impact economic growth.
- Jobless Claims Decline: Initial jobless claims in the U.S. decreased by 23,000 to 206,000 during the second week of February, below market estimates of 225,000, indicating a relatively strong labor market that may support economic recovery.
See More
U.S. Markets Decline Amid Rising Tensions with Iran
- Market Volatility: U.S. markets experienced volatility on Thursday due to escalating tensions with Iran, with the S&P 500 down 0.28%, the Dow Jones Industrial Average down 0.54%, and the Nasdaq Composite down 0.31%, indicating investor concerns over geopolitical risks.
- Rising Oil Prices: Oil prices surged nearly 2% in U.S. trading amid fears that military action could disrupt oil supplies from Iran, reflecting market anxiety over energy security and potentially leading to increased costs for related industries, impacting the broader economy.
- Blue Owl Capital Liquidity Tightening: Blue Owl Capital's sale of $1.4 billion in loan assets resulted in a nearly 6% drop in its stock, raising alarms about the stability of the private credit market, which could undermine investor confidence and exacerbate market volatility.
- Japan's Inflation Data: Japan's headline inflation rate fell to 1.5% in January, the lowest since March 2022, with core inflation easing to 2%, which may influence the Bank of Japan's monetary policy decisions and subsequently affect global market liquidity.
See More
Walmart's Cautious Outlook Amid Strong Consumer Resilience
- Consumer Resilience Analysis: CEO John Furner noted that while U.S. consumer spending is becoming more cautious, overall spending remains resilient, particularly among households earning over $100,000, which accounted for most of the market share gains.
- Market Reaction: Walmart's annual forecasts fell short of expectations, resulting in a 1.4% drop in stock price; however, Wall Street analysts believe the retail giant may surprise investors given the low expectations, indicating confidence in its future performance.
- Investor Sentiment Shift: According to Stocktwits data, investor sentiment on Walmart shifted from 'bullish' to 'extremely bullish', reflecting increased confidence in its stock, despite some users predicting a potential drop to $110.
- Long-term Investment Returns: Nancy Tengler, portfolio manager of the TGLR ETF, stated that Walmart's valuation is healthy, with a 670% increase in stock price over the past decade, showcasing its success in pivoting to new technologies, although some recent profit-taking occurred.
See More
Costco Shares Near $1,000: Caution Advised for Investors
- Strong Sales Growth: Costco's net sales for the four-week retail month of January 2026 rose 9.3% year-over-year to $21.3 billion, demonstrating the company's robust performance in the retail market and bolstering investor confidence in its future growth prospects.
- Rapid Membership Fee Growth: In the first quarter of fiscal 2025, Costco's membership fees increased by 14% year-over-year, indicating the company's success in maintaining customer loyalty and diversifying revenue streams, which further solidifies its market position.
- Outstanding E-commerce Performance: Costco's digital sales surged by 34.4% in January, and even after adjusting for gasoline and foreign exchange, the growth remained at 33.1%, showcasing the company's strong competitiveness in the e-commerce sector and alleviating concerns about potential threats from Amazon.
- Valuation Risks Emerge: Despite Costco's solid growth performance, its current P/E ratio of approximately 53 suggests that investors should approach with caution, as any slowdown in sales growth could negatively impact the stock price; thus, a more secure entry point around $830 is recommended.
See More
