Is Walmart Stock a Buy, Sell, or Hold After Earnings?

On Aug. 21, Walmart (WMT) released its fiscal 2026 second-quarter results, offering a mix of encouraging trends and short-term pressures. The top line surpassed Wall Street estimates.

The company’s online business continued its streak of double-digit growth, underscoring agility in a retail landscape increasingly shaped by e-commerce. Management also raised its full-year sales and earnings guidance, signaling confidence that growth will persist even as tariffs inflate costs.

However, the company’s earnings fell short for the first time since May 2022. The miss was influenced by one-time costs, including restructuring charges, higher insurance claims, and litigation settlements, which weighed on net income despite robust underlying operations.

Investors initially reacted with caution, sending WMT shares down approximately 4.5% on Aug. 21. Nonetheless, Walmart’s strategic emphasis on value, faster home deliveries, and an expanding customer base among higher-income households has helped it outperform many peers.

Based in Bentonville, Arkansas, Walmart operates as a technology-driven omnichannel retailer, spanning brick-and-mortar stores, wholesale clubs, e-commerce sites, and mobile applications. Valued at a market capitalization of $772 billion, the company reports across three primary segments: Walmart U.S., Walmart International, and Sam’s Club U.S.

Over the past 52 weeks, WMT stock has climbed 28%, significantly outpacing the S&P 500 Index ($SPX), which has gained 16% over the same period. Year-to-date, WMT has risen 7%, tracking behind the S&P 500’s 10% advance.

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WMT stock trades at 38 times forward adjusted earnings, reflecting investor confidence in future profitability, while its 1.15 sales multiple remains slightly below sector averages, indicating relative value.

Walmart has maintained a consistent commitment to shareholders, growing dividends for over 50 consecutive years and ranking among the Dividend Aristocrats. Its annual payout of $0.94 per share provides a 0.97% yield, with the next quarterly dividend of $0.235 per share scheduled for Jan. 5, 2026, for shareholders of record as of Dec. 12, 2025.

Walmart’s revenue in Q2 2026 increased 4.8% year-over-year (YOY) to $177.4 billion, beating analysts’ estimates of $176.16 billion. Comparable sales in Walmart U.S. grew 4.6%, surpassing the projected 4%, while Sam’s Club posted a 5.9% increase, exceeding the expected 5.2%.

The results reflected strong demand across physical stores, efficient operations, and an ability to navigate rising costs. E-commerce continued to be a major growth driver, with global online sales up 25% and U.S. e-commerce rising 26%.

Store-fulfilled delivery of groceries and other items in the U.S. jumped nearly 50% YOY, with roughly one-third of orders expedited, demonstrating the company’s success in meeting fast-delivery expectations.

Advertising revenue also strengthened Walmart’s bottom line. Globally, advertising grew 46% YOY, including contributions from Vizio, the smart TV maker acquired for $2.3 billion last year. In the U.S., Walmart Connect revenue increased 31%, reflecting effective monetization of its digital ecosystem.

The company’s net income jumped 56.1% to $7 billion, while adjusted EPS rose marginally YOY to $0.68. However, it missed the expected $0.74.

Looking ahead, management anticipates net sales growth of 3.75% to 4.75% for fiscal 2026, up from prior guidance of 3% to 4%. Adjusted EPS is projected between $2.52 and $2.62, slightly higher than the previous range of $2.50 to $2.60.

Analysts anticipate Q3 2026 EPS to grow 3.4% YOY to $0.60. Meanwhile, the full-year fiscal 2026 bottom line is expected to grow 3.6% to $2.60, with projections for 2027 pointing to a 12.3% EPS rise to $2.92.

Bernstein SocGen Group raised its price target from $113 to $117, maintaining an “Outperform” rating on WMT, signaling confidence in the company’s long-term trajectory. Telsey Advisory Group analyst Joseph Feldman also set a target of $118, emphasizing steady growth potential.

Conversely, JPMorgan analyst Christopher Horvers lowered his price target on WMT stock to $127 from $130 but retained an “Overweight” rating, noting temporary headwinds from catch-up insurance claims.

Analysts assign WMT stock an overall rating of “Strong Buy.” In total, 37 analysts cover the stock, with 30 assigning a “Strong Buy” rating, six recommending “Moderate Buy,” and one analyst suggesting “Hold.”

WMT stock’s average price target of $112.50 represent potential upside of 16% from here. Meanwhile, the Street-high target of $130 reflects a 34% potential gain from current levels.

On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com