Walmart (NASDAQ:WMT) Shares Gap Down - What's Next?

Key Points

• Walmart shares fell sharply, opening at $106.38 versus a prior close of $114.30 and later trading near $104, as investors reacted to weaker-than-expected forward guidance and U.S. comparable-sales growth.
• Fiscal Q2 results beat expectations, with adjusted EPS of $0.81 and revenue of $187.94 billion. E-commerce, advertising and membership revenue posted strong growth, but U.S. comparable sales rose just 2.6% and Q3 guidance trailed analyst estimates.
• Despite the selloff, analysts maintain a consensus “Moderate Buy” rating with an average price target of $138.50; however, some firms recently downgraded the stock or adopted more cautious views.

Walmart Inc. (NASDAQ:WMT - Get Free Report) shares gapped down before the market opened on Thursday . The stock had previously closed at $114.30, but opened at $106.38. Walmart shares last traded at $104.0670, with a volume of 22,416,160 shares.

Walmart News Summary

Here are the key news stories impacting Walmart this week:

• Positive Sentiment: Walmart reported fiscal second-quarter adjusted EPS of $0.81, above the $0.74 consensus estimate, while revenue rose 5.9% year over year to $187.94 billion, exceeding expectations. Walmart Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Higher-growth businesses remained strong: global e-commerce sales increased 23%, advertising revenue grew 38% and membership fee revenue rose 17%. Grocery sales also posted mid-single-digit growth as consumers prioritized affordability. Walmart Reports Revenue Growth
• Positive Sentiment: Walmart said it received nearly $2.9 billion in tariff refunds and plans to use part of the benefit to keep prices low, supporting customer traffic and contributing to stronger quarterly operating income. Walmart Says It Will Use Tariff Refunds to Lower Prices
• Neutral Sentiment: Management updated full-year fiscal 2027 guidance to $2.80–$2.87 in adjusted EPS and $734.7 billion–$741.7 billion in revenue. The outlook may represent an increase from prior company guidance, but both ranges remain below Wall Street expectations of approximately $2.89 EPS and $751.8 billion in revenue.
• Negative Sentiment: U.S. comparable sales grew 2.6% in the quarter, well below the 3.7% analyst estimate and the weakest growth in more than six years. The miss raised concerns that consumers are becoming more cautious. Walmart Reports Rare Comparable-Sales Miss
• Negative Sentiment: Third-quarter guidance was particularly disappointing: adjusted EPS of $0.62–$0.64 and revenue of $183.1 billion–$184.5 billion compare with consensus estimates of $0.68 EPS and $188.2 billion in revenue. A shift in Flipkart’s promotional event timing is expected to create a sales-growth headwind of more than 100 basis points.

Analysts Set New Price Targets

WMT has been the topic of several recent analyst reports. Erste Group Bank lowered shares of Walmart from a "buy" rating to a "hold" rating in a report on Friday, June 5th. Morgan Stanley increased their price target on shares of Walmart from $135.00 to $140.00 and gave the stock an "overweight" rating in a research report on Wednesday, April 22nd. BMO Capital Markets reissued an "outperform" rating on shares of Walmart in a research note on Friday, May 22nd. Oppenheimer downgraded shares of Walmart from a "market perform" rating to a "cautious" rating in a research report on Wednesday. Finally, Mizuho set a $130.00 target price on Walmart in a research note on Monday, July 27th. One investment analyst has rated the stock with a Strong Buy rating, thirty have assigned a Buy rating, four have issued a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $138.50.

Walmart Stock Performance

The stock's 50-day moving average is $114.03 and its 200-day moving average is $121.49. The firm has a market capitalization of $823.74 billion, a price-to-earnings ratio of 36.32, a PEG ratio of 4.31 and a beta of 0.61. The company has a current ratio of 0.77, a quick ratio of 0.23 and a debt-to-equity ratio of 0.42.

Walmart (NASDAQ:WMT - Get Free Report) last issued its earnings results 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 firm had revenue of $187.94 billion for the quarter, compared to analyst estimates of $186.62 billion. Walmart had a net margin of 3.13% and a return on equity of 21.25%. The company's quarterly revenue was up 5.9% on a year-over-year basis. During the same quarter last year, the business posted $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. On average, analysts predict that Walmart Inc. will post 2.88 EPS for the current fiscal year.

Insider Activity at Walmart

In other Walmart news, EVP Christopher James Nicholas sold 2,900 shares of the company's stock in a transaction dated Thursday, June 18th. The stock was sold at an average price of $118.19, for a total value of $342,751.00. Following the completion of the transaction, the executive vice president owned 574,953 shares of the company's stock, valued at $67,953,695.07. This represents a 0.50% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Latriece Watkins sold 11,000 shares of the stock in a transaction dated Thursday, May 28th. The shares were sold at an average price of $118.97, for a total value of $1,308,670.00. Following the completion of the transaction, the executive vice president owned 120,203 shares of the company's stock, valued at $14,300,550.91. This represents a 8.38% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 54,164 shares of company stock worth $6,389,402 over the last 90 days. 0.09% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Walmart

Several institutional investors and hedge funds have recently added to or reduced their stakes in WMT. Merkkuri Wealth Advisors LLC bought a new stake in shares of Walmart in the 1st quarter valued at about $29,000. Entrust Financial LLC bought a new position in shares of Walmart during the fourth quarter worth about $27,000. Bay Harbor Wealth Management LLC lifted its stake in shares of Walmart by 57.4% in the fourth quarter. Bay Harbor Wealth Management LLC now owns 288 shares of the retailer's stock worth $32,000 after acquiring an additional 105 shares during the period. Sankala Group LLC acquired a new position in shares of Walmart in the fourth quarter worth approximately $33,000. Finally, Turim 21 Investimentos Ltda. bought a new stake in Walmart in the first quarter valued at approximately $37,000. 26.76% of the stock is currently owned by institutional investors and hedge funds.

Walmart Company Profile

Walmart is a multinational retail corporation that operates a broad portfolio of store formats and digital services. Its core business includes large-format supercenters, discount department stores, neighborhood grocery stores and a membership warehouse chain, Sam’s Club. The company’s merchandising mix covers groceries, household goods, apparel, electronics and pharmacy services, supplemented by private-label products and category-specific offerings. Walmart pairs its physical store network with online platforms and mobile applications to provide omnichannel shopping, fulfillment and delivery options for consumers and businesses.

The company was founded by Sam Walton, who opened the first store in Rogers, Arkansas in 1962; it is headquartered in Bentonville, Arkansas.

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