Walmart: Well-Positioned for Near-Term EPS Upside and Long-Term Growth Driven by Category Momentum and AI Leadership

Analyst Paul Lejuez from Citi maintained a Buy rating on Walmart and keeping the price target at $120.00.

Paul Lejuez has given his Buy rating due to a combination of factors that signal Walmart is well positioned heading into the next fiscal year. Management indicated that the holiday season performed at least in line with expectations, with particularly strong demand right before Christmas, and Lejuez believes this supports the likelihood of Walmart exceeding its fourth-quarter EPS guidance. He also highlights that actual consumer spending at Walmart remains healthier than sentiment surveys suggest, reinforcing confidence in the company’s near-term sales trajectory. In addition, management expects fiscal 2026 to be less volatile than the prior year, with the potential for broader strength across general merchandise, which could provide incremental margin upside.

Lejuez also underscores category-level momentum and strategic advantages that support his positive view. Fashion and related categories such as beauty, baby, seasonal décor, and dining are showing solid growth, and he sees improving fashion credibility as a way to enhance Walmart’s brand perception and mix. He views food disinflation as a likely catalyst for increased spending on higher-margin general merchandise as customers redeploy savings. Finally, he notes Walmart’s leadership in AI and its favorable economics in partnerships with platforms like ChatGPT and Gemini, positioning the company as a technological disruptor within retail and supporting longer-term earnings power.

Lejuez covers the Consumer Cyclical sector, focusing on stocks such as Abercrombie Fitch, TJX Companies, and Urban Outfitters. According to TipRanks, Lejuez has an average return of 11.3% and a 60.78% success rate on recommended stocks.

In another report released today, Bernstein also maintained a Buy rating on the stock with a $129.00 price target.