Is Walmart Stock a Buy, Sell, or Hold Ahead of Q3 Earnings?

Core Viewpoint - Walmart is preparing to report its third-quarter fiscal 2026 results, with steady quarterly performances but limited stock movement recently, showing a 1.6% increase over the last three months [1] Group 1: Financial Performance and Expectations - The company expects Q3 revenue to rise between 3.75% and 4.75%, aided by the acquisition of VIZIO and its extensive store network enhancing digital sales through faster deliveries [6] - E-commerce is anticipated to significantly contribute to Walmart's revenue, with online sales having increased by 25% year-over-year in Q2, and U.S. digital sales growing even faster at 26% [7] - Walmart's fulfillment channels, particularly store deliveries, are driving growth, with a 50% surge in delivery from stores in Q2, and rapid delivery times enhancing competitive advantage [8] Group 2: Market Conditions and Challenges - The retailer benefits from a diverse revenue mix and higher-margin businesses, which have supported profitability amid a volatile consumer environment [2] - Rising costs associated with tariffs are exerting pressure on margins, contributing to subdued stock momentum [3] - Options markets are pricing in a 4.9% swing in either direction post-earnings release, indicating mixed sentiment as historically, Walmart shares have fallen in two of the past four earnings reactions [4] Group 3: Strategic Advantages - Walmart's value pricing strategy, wide product range, and ease of shopping continue to drive its top line, even in an uncertain economic environment [5] - The company's vast store network serves as an efficient fulfillment network, with one in three recent store deliveries arriving within three hours and one in five within 30 minutes [8]