Walmart is the world's largest retail chain, operating in the consumer staples sector. The company's business model is based on selling essential goods, making it resilient to economic cycles. Walmart's key growth drivers include increasing market share in groceries, particularly among higher-income consumers, expanding its e-commerce and omnichannel strategy, and growing its presence in financial services and subscriptions, such as Walmart Plus.
Financial forecasts for the coming years indicate steady revenue and earnings growth, albeit at a moderate pace. In fiscal year 2026, the company is expected to achieve EPS of $2.76 and revenue of $707.87 billion. In 2027, EPS is projected to rise to $3.09, with revenue reaching $738.12 billion. By 2028, Walmart's EPS is forecasted at $3.44, with revenue climbing to $780.36 billion.
The Q4 2025 financial results show that Walmart reported total revenue of $180.6 billion, including a negative currency impact of $2.1 billion. EPS were $0.66, down from $0.68 in Q4 2024. Operating income increased by 8.3% year-over-year, outpacing net sales growth of 4.0%. Adjusted operating income (constant currency) rose by 9.4%, compared to net sales growth of 5.2% in constant currency. Gross profit margin improved to 23.9%, up 53 basis points year-over-year.
Walmart successfully improved operational efficiency and profitability, but the decline in EPS suggests rising cost pressures. The market reacted negatively to the earnings report, with pre-market stock price dropping to $97, a 7% decline from the previous day's $104.
The stock's key technical levels are support at $93.46 and resistance at $104.06. The average cost basis for investors is $92.95. Recent market behavior indicates caution. On February 18, Walmart saw a capital inflow of $30.1 million, suggesting optimism ahead of earnings. However, between February 11 and 14, there were significant outflows, indicating potential profit-taking by institutional investors. Following the earnings release, further sell-offs are likely due to concerns over declining EPS, despite strong revenue and operating income growth.
Analysts' average price target for Walmart is $107.74, with a low estimate of $91 and a high estimate of $120. Among analysts, 11 recommend "strong buy," 29 suggest "buy," and 3 recommend "hold." While analyst sentiment remains positive, the market reaction to declining EPS could lead to downward revisions in forecasts.
Potential risks for Walmart include:
A second consecutive EPS decline, which may signal sustained cost pressures.
Rising operating expenses linked to logistics, technology, and e-commerce investments.
Further stock price correction, as investors take profits following a strong rally.
On the positive side:
Strong sales growth despite a challenging macroeconomic environment.
Higher operating profitability, with income growing faster than revenue.
A dominant position in groceries and consumer essentials, making Walmart more resilient to economic downturns.
Walmart remains a strong long-term investment, but a short-term correction could present better buying opportunities. Reasons to buy Walmart now include its stability in the consumer staples sector, growth in e-commerce and grocery sales, and a stock price pullback that may create a more attractive entry point in the $93-$95 range. However, reasons to wait include the EPS decline, potential continued sell-offs, and margin pressure in the short term.
Overall, Walmart remains a dominant force in the retail industry, but short-term investors should consider whether the current valuation is attractive or if further weakness will provide a better entry point.
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