Why Walmart Stock (WMT) Bulls Expect Their Winning Streak to Continue

Walmart (WMT) has firmly established itself as the most dependable large-cap retailer in today’s challenging consumer environment. Over the past twelve quarters, the juggernaut retailer has exceeded EPS and revenue expectations in nine, underscoring its reputation for consistent execution and operational excellence.

The company is scheduled to report its fiscal 2026 Q3 earnings on November 20, just eight days from now, with investors closely watching for another potential beat.

Q3 Outlook: Expecting Another Beat, with Cautious Guidance

For the upcoming quarter, consensus estimates call for EPS of $0.60 on revenue of $177.42 billion. Over the past twelve months, analysts have modestly reduced EPS forecasts by about 2%, while raising revenue expectations by roughly 1%—a signal of healthy top-line growth but cautious sentiment regarding margins.

I expect Walmart to continue its pattern of earnings outperformance when it reports results on November 20. The company remains well-positioned to deliver solid sales and modest margin expansion, supported by strength in grocery, e-commerce, and its growing digital ecosystem.

For Q3, I model 4.3% total sales growth, above the midpoint of management’s 3.75–4.75% guidance. In the core Walmart U.S. segment, I forecast comparable sales growth of 4.1%, slightly outpacing the Street’s 3.9% estimate. Key drivers include resilient grocery demand, accelerating e-commerce growth, and strong performance in the health & wellness sector.

Meanwhile, Walmart’s e-commerce, grocery, and advertising categories continue to capture incremental share from traditional retailers and smaller competitors. Digital sales momentum is robust, with global e-commerce revenue up 25%, led by 26% growth in Walmart U.S. and Sam’s Club. Rapid delivery capabilities—now completing about one-third of store deliveries in under three hours and 20% in thirty minutes or less—are further enhancing the customer experience and reinforcing loyalty.

On the bottom line, I expect EPS to land slightly above the top end of guidance ($0.58–$0.60) and above the consensus $0.60 estimate. However, management is likely to maintain a conservative tone when updating full-year guidance, perhaps nudging its EPS outlook higher from $2.52, but avoiding an aggressive reset amid macro uncertainties tied to benefit reductions and government funding risks.

Strategic Investments Drive Long-Term Growth

Walmart continues to reinvest its substantial cash flow—projected at roughly $58 billion in economic operating cash flow over the next twelve months—into initiatives that strengthen its competitive moat and drive sustainable growth.

Moreover, the company is rapidly scaling AI, robotics, and automation across its supply chain and store network, laying the foundation for a “smart store” transformation. These technologies are improving fulfillment speed, reducing costs, and enhancing inventory precision. Walmart recently introduced new AI roles dedicated to accelerating the integration of scaled automation in both operations and customer-facing business units.

Beyond logistics, Walmart is expanding into high-margin verticals, including digital advertising, financial services, and healthcare. Its advertising arm, Walmart Connect, grew 46% globally, reflecting strong demand from brand partners leveraging Walmart’s extensive customer data. Meanwhile, the Walmart+ membership program continues to expand, with membership income up 15% globally, further strengthening customer retention and cross-selling potential.

Internationally, Walmart is also experiencing broad-based strength, with sales up 10.5% in constant currency, driven by growth in China, Walmex, and Flipkart. These markets continue to benefit from digital adoption and improved omnichannel execution.

At Sam’s Club U.S., comparable sales rose 5.9%, driven primarily by unit growth and improved traffic, reflecting the brand’s strong value proposition and efficient operations.

Profit Pressures and Near-Term Challenges

Despite robust top-line growth, profitability has faced short-term headwinds. Adjusted operating income rose just 0.4% in constant currency, below expectations, primarily due to $450 million in additional general liability claims expenses—a 560-basis-point headwind to adjusted operating income growth.

Other challenges include tariff-related cost pressures, which have impacted imported goods and disproportionately affected middle- and lower-income consumers. Global inventory levels also rose 4%, driven by higher input costs and timing of receipts, reflecting ongoing complexities in supply chain management.

Valuation: Premium, but Justified by Performance

Walmart’s valuation remains elevated relative to peers—but its consistency, scale, and innovation justify the premium.

• P/E (GAAP, TTM): 38.7x vs. sector median 21.2x
• EV/EBITDA (TTM): 20.5x vs. sector median 10.9x

While these multiples imply a rich valuation, they are well-supported by superior fundamentals. Over the past five years, Walmart has delivered.

• Revenue Growth (YoY): 5.2% vs. sector median 2.7%
• EBITDA Growth (YoY): 4.8% vs. sector median 2.4%
• EPS Growth (YoY): 12.0% vs. sector median 1.4%

Using a blended approach that incorporates 14 valuation models, including Discounted Dividend Models (DDM), P/E multiples, and five-year DCF revenue exit models, I estimate Walmart’s fair value at approximately $85 per share, suggesting a potential 17% downside from current levels. However, Walmart’s resilience, scale advantages, and consistent execution likely justify a valuation premium versus weaker retail peers.

Is WMT a Buy, Hold, or Sell?

According to TipRanks, Wall Street remains overwhelmingly bullish on Walmart. The stock holds a Strong Buy consensus based on 28 analyst ratings, all of which are Buys. WMT’s average stock price target of $116.26 implies approximately 12% upside potential over the next twelve months.

See more WMT analyst ratings

Scale, Consistency, and Innovation Keep Walmart on Top

Heading into Q3 earnings, the case for Walmart remains compelling. The company’s diversified revenue streams, strong grocery leadership, and expanding digital ecosystem position it to outperform even in a cautious retail backdrop.

While management may remain conservative in guidance due to macro factors, the underlying growth engines—grocery, e-commerce, advertising, and international expansion—remain robust.

In the long term, Walmart’s scale, technological transformation, and steady execution justify its valuation premium and reinforce its status as one of the most reliable large-cap growth stories in the global retail sector. I expect another earnings beat this quarter and continued market share gains well into 2026.