Walmart
WMT Mega CapConsumer Defensive · Discount Stores
Updated: May 20, 2026, 22:09 UTC
Key Metrics
Valuation Analysis
About the Company
Walmart Inc. engages in the operation of retail and wholesale stores and clubs, ecommerce websites, and mobile applications worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam's Club U.S. It operates supercenters, supermarkets, warehouse clubs, cash and carry stores, and discount stores under Walmart and Walmart Neighborhood Market brands; membership-only warehouse clubs; and ecommerce websites, such as walmart.com.mx, walmart.ca, flipkart.com, PhonePe and other sites. It offers grocery items, including dry grocery, snacks, dairy, meat, produce, deli and bakery, frozen foods, alcoholic and nonalcoholic beverages, as well as consumables, such as health and beauty aids, pet supplies, household chemicals, paper goods, and baby products; and fue
Walmart Stock at a Glance
Walmart (WMT) is currently trading at $130.85 with a market capitalization of $1.04T. The trailing P/E ratio stands at 48.11x, with a forward P/E of 39.73x. The 52-week range spans from $93.43 to $135.16; the current price is 3.2% below the yearly high. Year-over-year revenue growth stands at +5.6%. The net profit margin stands at 3.07%.
💰 Dividend
Walmart pays an annual dividend of $0.99 per share, representing a yield of 0.76%. The payout ratio stands at 34.43%.
📊 Analyst Rating
41 analysts rate Walmart (WMT) on consensus: Strong Buy. The average price target is $137.78, implying +5.3% from the current price. Analyst price targets range from $62.00 to $150.00.
Investment Thesis: Strengths & Weaknesses
- High return on equity (21.85% ROE)
- Analyst consensus: Strong Buy
- Positive free cash flow
- –Low profitability (3.07% margin)
- –Currently flagged as overvalued
Technical Snapshot
Price trades above both the 50- and 200-day moving averages, with 50d above 200d — a classic bullish setup (golden-cross alignment).
Risk Profile
The data points to relatively defensive market behavior.
Trading Data
💵 Dividend Info
Related Stocks in the Same Sector
Walmart 2026: The $1 Trillion Defensive That Turned Into an AI-Powered Growth Story
The Real Story
Walmart crossed the $1 trillion market cap mark in November 2025, becoming the seventh US company in the four-comma club. The stock at $127.62 is no longer trading like a slow-growth defensive — it trades at forward P/E 38.8, the same multiple as Costco and Procter & Gamble premium-quality compounders. The 2026 story is dual: Walmart's defensive grocery moat is intact, AND a new growth engine has emerged — high-margin advertising, marketplace fees, and Walmart+ subscription revenue.
Q4/FY2026 (released February 20, 2026) confirmed the inflection. US comparable sales grew +4.6%, transactions +1.9%, average ticket +2.7%. The real story is in the margin mix: Walmart Connect (advertising) grew 31% YoY to $4.4B run-rate, and Walmart+ membership crossed 38M subscribers (vs. Amazon Prime's ~190M in the US). High-margin alternative revenue streams now contribute 12% of gross profit despite being only 4% of total revenue.
The operational moat continues to widen. Walmart's automated-fulfillment network reached 60% of US e-commerce volume in Q1/2026, up from 38% a year prior. Cost-per-package fell 23% as a result. E-commerce gross margin turned positive for the first time in Q4/FY2025. The combination of scale + automation + advertising = the structural reason Walmart can sustain a 38× forward P/E that would be crazy for a traditional retailer.
What Smart Money Thinks
Walmart's institutional ownership is dominated by passive index funds (Vanguard 8.2%, BlackRock 6.4%, State Street 4.1%) and the Walton family trusts (45% combined). The active 13F community is meaningfully underweight relative to S&P 500 weight — a divergence that has been true since Walmart's PE expansion from 18× to 38× over 2022–2026. The notable buyers: Akre Capital (added 230,000 shares Q1/2026) and Capital Group (added 4.1M shares since Q3/2025).
The Walton family — 11 family members combined — held $325B+ in WMT stock at peak December 2025, making it the largest single-family-owned public-company stake by a meaningful margin. Form 4 filings show family trusts have NOT been net sellers despite the price appreciation; selling pattern is purely scheduled charity giving, no opportunistic disposition. The family thesis-by-action remains hold.
Insider activity (Form 4): CEO Doug McMillon sold 88,000 shares in February 2026 at $124 (10b5-1 routine plan). CFO John Rainey added 5,000 shares at $118 in March 2026 — the first open-market insider buy by a Walmart senior officer since 2019. This single buy at sub-$120 created an interesting reference point: Rainey's price level may signal where management sees the floor.
Explore the BMI Smart-Money Tracker →
📈 The 3 Real Bull Points
Walmart Connect (the company's retail-media network) is the most underweighted business inside WMT. At $4.4B annualized in Q1/2026 (up 31% YoY) with 80%+ gross margins, the segment generates ~$3.5B in gross profit — over 5% of total Walmart gross profit despite being <2% of revenue. If Connect scales to $20B+ by 2028 (consensus pathway), it generates $16B of incremental gross profit. That alone is worth ~$130 per share at peer-multiple of advertising-business EBITDA.
After eight years of e-commerce gross margin losses, Walmart's online business turned positive in Q4/FY2025 (+0.3%). The Q1/FY2026 print continued the trend (+0.8%). The structural cause: Walmart's automated micro-fulfillment centers (now serving 60% of US e-comm orders) lowered cost-per-package by 23%. The trajectory implies e-commerce reaches store-level gross margins (24%+) by 2028 — and online is growing 3× faster than store, mechanically improving total company gross margin.
Walmart+ crossed 38M subscribers in Q1/2026 at $98/year — generating $3.7B in nearly-100%-margin subscription revenue. Costco's 75M members at $130 each generates $4.8B comparable revenue but represents the entire reason Costco trades at 47× forward P/E. As Walmart+ approaches 50M members in 2027 (Walton-disclosed internal target), it generates $5B+ of subscription revenue — and earns the right to be valued on a Costco-similar membership-multiple framework.
📉 The 3 Real Bear Points
Walmart's forward P/E of 38.8 is the highest in the company's history outside of brief bubble periods. It is roughly 2× the 20-year average. The thesis embedded: e-commerce gross margin reaches 20% by 2028 AND Walmart Connect scales to $20B+ AND grocery deflation does not return AND Walmart+ continues compounding. Four conditions must all materialize. Forward P/E historical range: 14–28×. A reversion to mid-range would imply a stock price of $90 — a 30% drawdown.
Walmart's trade-down trade in 2023–2025 was driven by $100K+ household-income shoppers (32% of new sign-ups in 2024 per Numerator data). These shoppers came for inflation; they will leave for convenience when the consumer environment normalizes. Q1/2026 US transaction growth (+1.9%) is meaningfully below Q1/2025 (+3.6%), already suggesting the trade-down tailwind is fading. If high-income shoppers revert to Whole Foods/Wegmans, comparable sales growth halves.
GLP-1 weight-loss-drug users reduce total food spend by 11–14% per Numerator and BCG studies. With 14M US users by April 2026 and projected 30M by 2028, the structural grocery-spend headwind is real. Walmart grocery represents 56% of US revenue. A 5% reduction in grocery spend among 8% of customers translates to a 22 bps drag on comparable sales — small but cumulative. The grocery-comp story that drove the multiple expansion gets harder to sustain.
Valuation in Context
Walmart trades at a forward P/E of 38.8, EV/Sales of 1.0, and EV/EBITDA of 22.4 as of May 2026. The comparable peer set has bifurcated: defensive retailers (Target forward P/E 14, Kroger 12) versus premium-membership/digital plays (Costco 47, Amazon 32, Home Depot 25). Walmart now trades closer to the premium cohort despite still deriving 95%+ of revenue from physical retail. Sum-of-the-parts: core US retail at $58/share (15× core EPS), International at $14/share, Sam's Club at $11/share, Walmart Connect advertising at $25/share (peer-multiple), Walmart+ subscription at $9/share, fintech (One) at $4/share — total $121/share. Current $127.62 is roughly 5% above the conservative SOTP framework. Wall Street median price target $137.10 (7% upside), with dispersion from $112 (Bernstein, valuation bear) to $158 (Morgan Stanley, advertising/membership bull). Dividend yield 0.78% with 60% payout — not the income story it was in the 2000s.
🗓️ Next 3 Catalyst Dates
- August 21, 2026: Q2/FY2027 earnings — Walmart Connect ad revenue trajectory and US transaction growth are the make-or-break KPIs
- October 2026: Investor Day — management is expected to provide formal long-term targets for advertising, membership, and e-commerce margins
- Q4/2026 holiday season: First holiday season with full automated-fulfillment scale — e-commerce margin print will be closely watched
💬 Daniel's Take
Walmart at $127 is the kind of position where I trim rather than add. The bull case is real — the advertising and membership flywheel is genuine, and the e-commerce-margin inflection is finally happening. But the forward P/E of 38× already embeds five years of perfect execution, and Walmart still derives 95%+ of revenue from a physical-retail business that grows 3–5% per year. For a long-term holder who bought below $80 in 2022, holding makes sense — the dividend keeps compounding and the buyback continues. For a fresh buyer at $127, the math gets harder: at 38× forward P/E, even 10% EPS growth produces a 12% annualized return only if the multiple stays at 38×. My add-trigger is below $105 (sub-30× forward) where the asymmetry favors entry. Until then, this is a hold-not-buy zone, and a meaningful pullback would be welcome.
Sources (3)
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
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