No Change In Walmart's Strong Momentum, Analysts Confirm

Core Viewpoint - Walmart Inc. reported second-quarter results that included a miss on adjusted earnings per share but an increase in annual guidance, indicating a mixed performance with strong sales growth [1][2]. Financial Performance - Adjusted earnings per share for the second quarter were 68 cents, below the analyst consensus estimate of 74 cents [1]. - Quarterly sales reached $177.40 billion, reflecting a year-over-year increase of 4.8%, surpassing the expected $176.16 billion [2]. - Total revenues on a constant currency basis increased by 5.6% [2]. Guidance and Analyst Reactions - Walmart raised its fiscal year 2026 adjusted earnings per share guidance to a range of $2.52–$2.62, up from the previous $2.50–$2.60, compared to the analyst estimate of $2.62 [2]. - Analyst Joseph Feldman raised the price forecast from $115 to $118, citing strong e-commerce growth of 26% and solid food sales [3]. - Analyst Christopher Horvers maintained an Overweight rating but lowered the price forecast from $130 to $127, emphasizing that Walmart's outlook remains stable despite competition [5]. Growth Drivers - Walmart's expansion into higher-margin areas such as digital ads and merchant services is expected to drive faster income growth [4]. - Analyst Robert F. Ohmes noted that Walmart's gross margin is benefiting from higher-margin businesses, which have made U.S. e-commerce profitable [7]. - Analyst Steven Shemesh highlighted strong sales momentum in grocery, predicting further market share gains due to widening price gaps [10]. Future Projections - Analysts expect continued growth in earnings per share, with estimates for fiscal year 2027 raised from $2.90 to $2.94 [9]. - Walmart's sales growth projections for 2025 and 2026 have been adjusted to 4.6% and 5.0%, respectively [10][11]. - Analyst Kate McShane raised the price forecast from $101 to $114, indicating confidence in Walmart's value strategy and market share gains [12].