Walmart (NASDAQ:WMT) Shares Down 1.8% on Analyst Downgrade

Key Points

• Walmart shares fell 1.8% after Mizuho cut its price target from $130 to $125, though it maintained an “outperform” rating. The broader analyst consensus remains “Moderate Buy,” with an average target of $131.74.
• Walmart recently exceeded quarterly expectations, reporting $0.81 in EPS versus a $0.74 estimate and $187.94 billion in revenue, up 5.9% year over year.
• Potential growth drivers include membership expansion and Meta’s AI shopping partnership, while investors remain focused on delivery profitability and the company’s relatively high valuation.

Walmart Inc. (NASDAQ:WMT - Get Free Report)'s share price dropped 1.8% during mid-day trading on Tuesday after Mizuho lowered their price target on the stock from $130.00 to $125.00. Mizuho currently has an outperform rating on the stock. Walmart traded as low as $105.35 and last traded at $106.80. Approximately 24,663,749 shares were traded during mid-day trading, a decline of 3% from the average session volume of 25,358,092 shares. The stock had previously closed at $108.73.

Several other equities analysts have also issued reports on the stock. JPMorgan Chase & Co. cut their price target on shares of Walmart from $137.00 to $125.00 and set an "overweight" rating on the stock in a report on Friday, August 21st. BMO Capital Markets reissued an "outperform" rating and issued a $126.00 price objective on shares of Walmart in a research report on Friday, August 21st. The Goldman Sachs Group restated a "buy" rating and set a $130.00 target price on shares of Walmart in a research note on Friday, August 21st. Roth Capital reaffirmed a "buy" rating on shares of Walmart in a research report on Friday, August 21st. Finally, Robert W. Baird decreased their price target on Walmart from $140.00 to $120.00 and set an "outperform" rating for the company in a research note on Friday, August 21st. Three equities research analysts have rated the stock with a Strong Buy rating, thirty-two have issued a Buy rating and four have given a Hold rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $131.74.

Insider Transactions at Walmart

In related news, EVP Daniel Danker sold 50,644 shares of the stock in a transaction that occurred on Wednesday, August 26th. The shares were sold at an average price of $105.35, for a total value of $5,335,345.40. Following the transaction, the executive vice president owned 201,672 shares in the company, valued at approximately $21,246,145.20. This represents a 20.07% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO John Furner sold 13,125 shares of Walmart stock in a transaction that occurred on Thursday, September 17th. The shares were sold at an average price of $106.66, for a total transaction of $1,399,912.50. Following the sale, the chief executive officer owned 647,912 shares of the company's stock, valued at approximately $69,106,293.92. The trade was a 1.99% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 81,004 shares of company stock worth $8,601,724. 0.09% of the stock is owned by company insiders.

Key Stories Impacting Walmart

Here are the key news stories impacting Walmart this week:

• Positive Sentiment: Membership growth could support profits: Record membership revenue from Walmart+, Sam’s Club and international operations may increase customer engagement, strengthen e-commerce economics and provide a higher-margin recurring revenue stream. Walmart's Membership Gains Scale: Is It the Next Major Profit Engine?
• Positive Sentiment: Expanded AI-driven shopping access: Meta is adding Walmart to the partners supported by its Muse AI shopping agent. The arrangement could generate incremental online sales and customer discovery, although Meta is expected to monetize transactions through fees. Meta’s Muse Is Taking Aim at E-Commerce, But Amazon Isn’t Playing Along
• Positive Sentiment: Customer-trust positioning: CEO John Furner said Walmart will not use artificial intelligence to set personalized prices, potentially differentiating the retailer amid concerns about algorithmic pricing and supporting its value-focused brand. Walmart CEO says company won't use AI to set personalized prices
• Neutral Sentiment: AI signage restrictions: Walmart has prohibited stores from using generative AI to create display signs. The policy may improve consistency and reduce inaccurate or low-quality messaging, but it also limits a potential labor-saving use of AI. Walmart bans AI slop signs in stores
• Negative Sentiment: Lower valuation benchmark: Mizuho cut its Walmart price target from $130 to $125 while maintaining an “outperform” rating. The continued bullish rating is supportive, but the lower target may weigh on sentiment, particularly with the shares trading at a high earnings multiple. Mizuho lowers Walmart price target
• Negative Sentiment: Delivery profitability remains uncertain: Store-fulfilled delivery increased about 40%, but small “forgotten grocery” orders could carry high picking and delivery costs. Investors are watching whether fees and merchandise margins can offset those expenses. Walmart Delivers Forgotten Groceries Fast

Hedge Funds Weigh In On Walmart

A number of institutional investors have recently modified their holdings of the stock. State Street Corp lifted its holdings in Walmart by 1.1% in the second quarter. State Street Corp now owns 188,036,646 shares of the retailer's stock valued at $21,297,031,000 after acquiring an additional 2,107,781 shares during the period. Bank of America Corp DE purchased a new position in shares of Walmart during the 2nd quarter valued at approximately $7,455,131,000. Franklin Resources Inc. increased its holdings in shares of Walmart by 2.6% during the 4th quarter. Franklin Resources Inc. now owns 36,820,550 shares of the retailer's stock valued at $4,102,546,000 after purchasing an additional 920,969 shares in the last quarter. Bank of New York Mellon Corp lifted its stake in shares of Walmart by 6.4% in the 1st quarter. Bank of New York Mellon Corp now owns 28,142,040 shares of the retailer's stock valued at $3,497,493,000 after purchasing an additional 1,681,353 shares during the period. Finally, Legal & General Group Plc acquired a new position in shares of Walmart in the 2nd quarter valued at $2,905,655,000. Hedge funds and other institutional investors own 26.76% of the company's stock.

Walmart Price Performance

The stock's fifty day moving average is $109.17 and its 200-day moving average is $117.47. The stock has a market capitalization of $847.32 billion, a PE ratio of 38.56, a P/E/G ratio of 4.12 and a beta of 0.59. The company has a debt-to-equity ratio of 0.41, a current ratio of 0.77 and a quick ratio of 0.23.

Walmart (NASDAQ:WMT - Get Free Report) last released its quarterly earnings data on Thursday, August 20th. The retailer reported $0.81 earnings per share for the quarter, beating analysts' consensus estimates of $0.74 by $0.07. The company had revenue of $187.94 billion during the quarter, compared to analysts' expectations of $186.64 billion. Walmart had a net margin of 3.00% and a return on equity of 21.83%. The firm's revenue for the quarter was up 5.9% on a year-over-year basis. During the same quarter in the previous year, the company earned $0.68 earnings per share. Walmart has set its Q3 2027 guidance at 0.620-0.640 EPS and its FY 2027 guidance at 2.800-2.870 EPS. As a group, equities analysts predict that Walmart Inc. will post 2.87 earnings per share for the current fiscal year.

Walmart Company Profile

Walmart Inc NASDAQ: WMT is a multinational retailer that operates supercenters, discount stores, neighborhood markets, warehouse clubs and e-commerce platforms. Its merchandise includes groceries, apparel, electronics, home goods, health and wellness products, household essentials and general merchandise. Walmart also provides services such as grocery pickup and delivery, pharmacy services, financial products and digital advertising.

The company serves customers through its Walmart U.S., Walmart International and Sam's Club segments.

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