WMT · Walmart
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $136.00
Note written ·
Price against the kill line
5.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $136.00, on record since 11 November 2026. The shares are up 12.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $136.00, past the May 2026 52-week high and most broker targets, which would show the shares leading. A 19 November 2026 report with Walmart U.S. comparable sales above 3% excluding fuel and a full-year adjusted EPS range raised above $2.87 would also prove the call wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Consumer Discretionary
Quarter to 31 July 2026, filed 28 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 187,937
- Revenue, change on a year (%)
- +5.9
- Gross margin (%)
- 26.1
- Operating margin (%)
- 5.0
- Free cash flow, four quarters ($M)
- 13,509
- Net cash, cash less debt ($M)
- −38,882
- Price to earnings (×)
- 46.0
- Enterprise value to sales (×)
- 1.4
All filed numbers
What Walmart reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 187,937 | +5.9 | 26.1 | 5.0 |
| first filed | 177,751 | +7.3 | 25.1 | 4.2 |
| first filed | 190,656 | +5.6 | 24.7 | 4.6 |
| first filed | 179,496 | +5.8 | 25.0 | 3.7 |
| first filed | 177,402 | +4.8 | 25.2 | 4.1 |
| first filed | 165,609 | +2.5 | 24.9 | 4.3 |
| Pre-tax income ($M) | 8,012 |
| Net income ($M) four quarters: 22,076 | 6,366 |
| Diluted shares, change on a year (%) against the quarter to 31 July 2025 | −0.5 |
| Operating cash flow ($M) | 42,923 |
| Capital spending ($M) | 29,414 |
| Free cash flow ($M) | 13,509 |
| Cash and short-term investments ($M) | 11,529 |
| Debt ($M) non-current long-term debt plus current maturities plus short-term borrowings | 50,411 |
| Net cash, cash less debt ($M) | −38,882 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 11,075 |
| Inventory ($M) | 61,600 |
| Shareholders' equity ($M) | 98,238 |
| Market value ($M) | 1,016,234 |
| Enterprise value, market value plus net debt ($M) | 1,055,116 |
| Enterprise value to sales (×) | 1.4 |
| Enterprise value to operating income (×) | 32.7 |
| Price to earnings (×) | 46.0 |
| Price to book value (×) | 10.3 |
| Free-cash-flow yield (%) | 1.3 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 0.9% of shares outstanding sold short, 3.6 days of average trading to cover, −7.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $31.6M |
| 12 monthsfrom | $0 | $3.0B |
The thesis
Walmart shares look more likely to trail the S&P 500 than lead it over the next three months. Advertising and membership income is lifting profit faster than sales, but brokers have already priced that in. Six of them raised their price targets between 9 November 2026 and 11 November 2026. The third-quarter report on 19 November 2026 shows whether results can push estimates higher still.
The shares closed at $126.19 on 12 November 2026, below the $130.13 average analyst target MarketBeat reported on 9 November 2026. UBS raised its target to $149 on 9 November 2026 and now values the shares at about 40 times its calendar-2028 earnings estimate, up from 35 times (Proactive Investors). The consensus third-quarter earnings per share (EPS) estimate was $0.64 in Hudson Labs' preview of 19 October 2026. That is the top of Walmart's own $0.62–$0.64 guidance. The price already assumes a quarter at the top of guidance and a modest raise to the full-year range.
The rating is Low because the shares need a clear upside surprise to beat the index, and the brokers raised that bar in the week before the report. UBS said on 10 November 2026 that the shares may not move much on the report after their recent run (AD HOC NEWS).
Bullish and bearish views on Walmart Inc.
The bull case on Walmart Inc. (WMT), in brief: high-margin income is compounding fast. The bear case: core U.S. sales growth is slow.
Bull case
- High-margin income is compounding fast. Walmart reported on 20 August 2026 that global advertising grew 38% and membership fee revenue grew 17% in the second quarter of fiscal 2027. U.S. e-commerce sales grew 24%.
- Full-year guidance went up in August. On 20 August 2026 Walmart raised its fiscal 2027 adjusted EPS range to $2.80–$2.87 from $2.75–$2.85. It also lifted constant-currency sales growth to 4%–5% and adjusted operating income growth to 7%–8.5%.
- Brokers kept raising targets into the report. JPMorgan raised its target to $145 from $125 and UBS to $149 from $130 on 9 November 2026. Mizuho moved to $135 and BMO Capital raised its target on 10 November 2026. Baird went to $140 from $120 and BofA Securities to $139 from $126 on 11 November 2026, with BofA citing continued market-share gains. BTIG kept a Buy rating and a $140 target on 12 November 2026.
- UBS sees room for a guidance raise. UBS expects U.S. comparable sales growth to meet or modestly beat the 2%–3% Wall Street expectation, and analysts to lift EPS estimates by $0.03–$0.05 after the report (AD HOC NEWS, 10 November 2026).
- Delivery and automation reach keeps widening. Walmart and Zipline agreed on 5 November 2026 to open 300 more drone delivery sites (Benzinga). Benzinga reported a roughly $6 billion Symbotic contract on 29 October 2026 to automate 25 more Walmart U.S. regional distribution centers.
Bear case
- Core U.S. sales growth is slow. Walmart U.S. comparable sales rose 2.6% excluding fuel in the second quarter, with transactions up 1.5% and average ticket up 1.1%, the company reported on 20 August 2026. The shares fell about 9% on the day of that report, ValueTheMarkets reported on 21 August 2026.
- The quarter is guided soft. Walmart guided third-quarter adjusted EPS to $0.62–$0.64 and constant-currency sales growth to 3%–3.75% on 20 August 2026. The company said moving Flipkart's Big Billion Days sale into the fourth quarter costs more than one percentage point of third-quarter sales growth.
- Freight and price cuts press on margin. UBS estimates $650 million of extra freight expense in the quarter and a 16-basis-point change in U.S. gross margin from a year earlier, against a consensus that assumes flat margins (AD HOC NEWS, 10 November 2026). Hudson Labs' 19 October 2026 preview puts the tariff refunds Walmart is putting back into prices at about $2.9 billion.
- Holiday discounting started on 12 November 2026. The first of three Walmart holiday shopping events opened on 12 November 2026, and the events run to 2 December 2026. Deeper discounts would show more of the tariff-refund help going into prices instead of profit.
- Money is moving to cyclical stocks. Benzinga reported growth sectors leading and defensives trailing on 6 November 2026, and cyclicals leading with defensives trailing on 11 November 2026. Walmart trades with the defensive group.
- Executives sold during the rally. SEC Form 4 filings show Chief Technology Officer Suresh Kumar sold 166,342 shares at $123.21 on 30 October 2026 and Chief Executive John Furner sold 13,125 shares at an average $120.60 on 15 October 2026. Executive Vice President Daniel Bartlett sold 3,346 shares at $124.51 on 2 November 2026. All three sales were under Rule 10b5-1 trading plans.
Price setup
The shares closed at $126.19 on 12 November 2026, after six sessions between $125.52 (6 November 2026) and $127.72 (5 November 2026). They are up 9.7% over three months from the $115.27 close of 14 August 2026. The close sits above the 50-day moving average of $114.14 and the 200-day moving average of $118.55, both as of 12 November 2026.
Two levels frame the call. The $130.13 average analyst target (MarketBeat, 9 November 2026) sits just above the last close. The 52-week intraday high of $135.16 on 19 May 2026 sits higher, and the last close is 6.6% below it. A close past that May high would mean buyers paying more than most brokers' targets. The 52-week closing low is $100.61, set on 19 November 2025.
SEC Form 4 filings trace the October climb through executive trades. Latriece Watkins sold at $115.00 on 14 October 2026, Kumar at $123.21 on 30 October 2026, and shares withheld for tax on 3 November 2026 were priced at $127.69.
Catalysts ahead
- ~15 November 2026 (est.): Agent Profiles go live in Walmart customer accounts. Early use shows whether outside AI shopping assistants add orders for Walmart or weaken its own app and advertising reach.
- 19 November 2026: Third-quarter fiscal 2027 earnings release (about 6 a.m. Central) and call (7 a.m. Central). Shows whether U.S. comparable sales beat the 2%–3% expectation and whether the $2.80–$2.87 full-year EPS range rises enough to justify the target raises of 9 November to 12 November 2026.
- 2 December 2026: Last of Walmart's three holiday shopping events ends. The depth of holiday discounts shows how much of the tariff-refund margin help goes into lower prices during the fourth quarter.
- 9 December 2026: Federal Reserve rate decision. A hike would favor the defensive stocks Walmart trades with; a pause that eases rate fears would favor the cyclical rotation that has left defensives trailing.
What would change the view
A daily close above $136.00, past the May 2026 52-week high and most broker targets, which would show the shares leading. A 19 November 2026 report with Walmart U.S. comparable sales above 3% excluding fuel and a full-year adjusted EPS range raised above $2.87 would also prove the call wrong.
What it trades with
Walmart has traded with consumer staples and other defensive sectors in the October–November 2026 rotation. On 10 November 2026, when all 11 sectors fell, consumer staples were among the three that fell least (Benzinga). On 6 November 2026 and 11 November 2026, when growth or cyclical sectors led, defensives trailed. Federal Reserve rate expectations feed the same rotation, which ties the shares to the 9 December 2026 rate decision. Company news links Walmart to private partner Zipline and to listed partner Symbotic, whose roughly $6 billion contract depends on Walmart's distribution-center build-out. Benzinga put Walmart's market value at $995.84 billion on 9 November 2026, so it carries real weight in both the S&P 500 and staples indexes.
The evidence, claim by claim (8)
- Second-quarter fiscal 2027 revenue $187.9 billion, up 5.9%; adjusted EPS $0.81 versus a $0.74 consensus and $0.68 a year earlier. Walmart second-quarter fiscal 2027 earnings release (8-K) · as of
- Walmart U.S. comparable sales up 2.6% excluding fuel (transactions up 1.5%, ticket up 1.1%); U.S. e-commerce up 24%; global advertising up 38%; membership fee revenue up 17%. Walmart second-quarter fiscal 2027 earnings release (8-K) · as of
- Fiscal 2027 adjusted EPS guidance raised to $2.80–$2.87 from $2.75–$2.85; third-quarter adjusted EPS guided to $0.62–$0.64 with 3%–3.75% constant-currency sales growth. Walmart second-quarter fiscal 2027 earnings release (8-K) · as of
- Consensus third-quarter fiscal 2027 estimates: EPS $0.64 and revenue about $187.2 billion. Hudson Labs Walmart third-quarter fiscal 2027 earnings preview · as of
- JPMorgan raised its Walmart target to $145 from $125 and UBS to $149 from $130; UBS now applies about 40 times calendar-2028 earnings, up from 35 times. MarketBeat 9 November 2026; Proactive Investors · as of
- Baird raised its Walmart target to $140 from $120 and BofA Securities to $139 from $126, BofA citing continued market-share gains; BTIG kept $140 on 12 November 2026. fiscal.ai 11 November 2026 and 12 November 2026 · as of
- UBS estimates $650 million of extra third-quarter freight expense and expects U.S. comparable sales to meet or modestly beat the 2%–3% expectation. AD HOC NEWS 10 November 2026, citing UBS · as of
- CTO Suresh Kumar sold 166,342 shares at $123.21 on 30 October 2026 under a Rule 10b5-1 plan; CEO John Furner sold 13,125 shares at an average $120.60 on 15 October 2026. SEC Form 4 filings 3 November 2026 and 16 October 2026 · as of
Sources
- FY2027 Q3 Earnings Release · corporate.walmart.com
- Walmart (WMT) Earnings Preview — Q3 FY2027 · hudson-labs.com ·
- Walmart (NASDAQ:WMT) Price Target Raised to $145.00 · marketbeat.com ·
- Walmart stock: UBS raises target ahead of earnings · ad-hoc-news.de ·
- Walmart earnings growth potential extends beyond headline sales, UBS argues · proactiveinvestors.com
- Walmart (NASDAQ: WMT) Raises FY27 Outlook After Strong Q2 · valuethemarkets.com ·
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