Walmart (WMT) stock was lower today despite its mixed Q2 results failing to dampen the enthusiasm of analysts.
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Q2 Wobble
The company reported adjusted earnings per share for the period of $0.68, missing forecasts of $0.74. Operating income dropped 8.2% to $7.2 billion.
Revenues rose 4.8% to $177.4 billion, surpassing expectations of around $175 billion. U.S. same-store sales rocked up 4.6%, helped by strong demand for grocery, health and wellness and more pricing rollbacks given the uncertain economic picture.
E-commerce sales were strong over the period with a 25% hike in demand globally and by 26% in the U.S. alone. This was led by store-fulfilled pickup & delivery and marketplace.
How Did Analysts React?
Jason Strominger of Telsey Advisory raised the firm’s price target on Walmart to $118 from $115 and kept an Outperform rating on the shares. He expects Walmart will remain a market share gainer in the retail industry and is encouraged by the company’s expanded vision beyond retail and e-commerce. He added that the company’s planned new businesses are more profitable than traditional retail, which should help the company grow its operating income faster.
Mizuho analyst David Bellinger said the post-earnings selloff in shares of Walmart is a buying opportunity. “There is nothing thesis-changing in the Q2 earnings miss as insurance cost true-ups should not stick around forever,” he said.
Kelly Bania of BMO agreed that the bottom line had been hit by “unplanned insurance claims costs” and that the company faced the potential of near-term volatility “from tariffs which should build in the second half.”
However, she believes Walmart will “emerge as a major share gainer” and is on “offense” heading into the second half.
Oliver Chen, of TD Cowen, said Walmart remained a top 2025 idea boosted by “low prices and high convenience meeting artificial intelligence for the long-term.” He said that tariff-related price volatility was lower than expected and that it was still the value choice for consumers. He is also encouraged by back to school spend and the potential for the holiday season.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 28 Buy ratings. Its highest price target is $130. WMT stock’s consensus price target is $113.96, implying a 17.05% upside.
