NEW YORK, August 10, 2026, 11:16 EDT — Wall Street trading begins
- Walmart shares hovered around $111.78, marking a decline of roughly 17.3% from the stock’s 52-week peak. Despite this drop, the shares were valued at 39.2 times trailing earnings.
- Walmart’s forecast for the second quarter suggests around 17 basis points of growth in adjusted operating margin at the midpoint. This figure is an illustrative estimate rather than official company guidance.
- Options for Aug. 21 priced in a 5.79% swing. That is greater than the 4.7% protection offered by a bullish spread highlighted the week before.
Walmart NASDAQ:WMT faces a key challenge in its Aug. 20 results: converting strong digital sales momentum into clear improvements in margins.
This is significant as the shares are already priced with a growth-stock valuation. Walmart slipped by less than 0.1% in Nasdaq trading late in the morning.
The current valuation offers limited tolerance for a performance that is only defensive. Walmart’s trailing earnings multiple stands at 39.2.
Retail value comparison
| Company | Share price | Market value | Trailing P/E | Earnings yield |
|---|---|---|---|---|
| Walmart | $111.78 | $893.6 billion | 39.2x | 2.6% |
| Costco Wholesale NASDAQ:COST | $947.13 | $420.9 billion | 47.6x | 2.1% |
| Target NYSE:TGT | $150.31 | $68.4 billion | 19.8x | 5.0% |
| Kroger NYSE:KR | $56.75 | $34.9 billion | 33.2x | 3.0% |
Most recent U.S. quotes as of around 11 a.m. EDT. Earnings yield is calculated as the inverse of the trailing P/E ratio.
The peer spread indicates what investors are willing to pay. Walmart trades at a lower multiple than Costco, yet its valuation is nearly twice that of Target.
The target for operations is both ambitious and straightforward. Walmart projects sales to climb 4% to 5% in constant currency, while it expects adjusted operating income to grow between 7% and 10%.
Walmart faces second-quarter margin challenge
| Metric | Q2 FY2026 base | Q2 FY2027 guidance | Illustrative midpoint |
|---|---|---|---|
| Net sales | $175.8 billion | Increase of 4%-5% | $183.7 billion |
| Adjusted operating income | $7.9 billion | Up 7%-10% | $8.57 billion |
| Adjusted operating margin | 4.49% | Not provided | 4.67% |
| Margin change | — | — | Roughly 17 basis points |
| Adjusted EPS | $0.68 | $0.72-$0.74 | $0.73 |
Dollar results and margins are early estimates based on the company’s previous year baseline. Walmart has not disclosed those expected dollar figures.
Operating income is required to increase at a rate four percentage points higher than sales at the midpoint. As a result, the premium relies on the company’s business mix and productivity instead of its dividend classification.
All components are on display. Global e-commerce revenue climbed 26% in the first quarter. Advertising expanded by 37% and membership-fee income advanced 17.4%.
Walmart CEO John Furner stated the company was “growing higher-margin commerce solutions.” These segments are now required to balance out increased depreciation, healthcare, and fuel expenses. Walmart Inc.
Investor columns have recently highlighted Walmart’s resilience, expanding e-commerce, and history as a Dividend King. However, the declared annual dividend stands at $0.99, resulting in a yield of roughly 0.89% based on Monday’s share price.
This represents limited income support. Any bullish move in the near term relies primarily on price gains and ongoing earnings growth.
Wall Street sentiment is still upbeat, but opinions are diverging. Oppenheimer lowered its rating on Walmart, pointing to challenges in its pharmacy division, current valuation, and projections that exceed management’s guidance.
Highlighted analyst ratings
| Date | Analyst and firm | Recommendation | Price target | Upside from $111.78 |
|---|---|---|---|---|
| Aug. 10 | Oliver Chen, TD Cowen | Buy, reiteration | $150 | 34.2% |
| Aug. 4 | Rupesh Parikh, Oppenheimer | Perform, downgrade | Prior $140 withdrawn | — |
| Aug. 3 | Simeon Gutman, Morgan Stanley | Buy, reiteration | $140 | 25.3% |
| Aug. 3 | Paul Lejuez, Citi | Buy, reiterated | $147 | 31.5% |
| July 31 | Christopher Horvers, J.P. Morgan | Buy, reiterated | $137 | 22.6% |
Recent notable movements. Upside values are based on Monday’s most recent closing price.
According to Google Finance’s three-month summary, there are 26 buy recommendations and three hold ratings. The consensus price target is $140.78, suggesting an upside of about 26%.
Options market participants are anticipating a significant move following the earnings report. Contracts expiring on Aug. 21 reflect an implied move of 5.79%, or roughly $6.47 per share.
Options risk assessment
| Measure | Level | Distance from $111.78 |
|---|---|---|
| Aug. 21 implied change | ±5.79%, or ±$6.47 | Between $105.30 and $118.25 |
| Aug. 6 bull-put break-even | $106.48 | 4.7% lower |
| Point of maximum loss | $104.00 | 7.0% lower |
| Listed spread premium | $52 per spread | — |
| Listed max risk | $248 per spread | — |
| Highest risk-adjusted return | 21.0% | Solely if stock remains above $107 |
The bull-put details appeared on Aug. 6 and are not current options quotes.
The spread’s expiration price does not entirely offset the downside suggested by the market. The breakeven is $106.48, which remains above the implied bottom close to $105.30.
The debate is likely to be resolved by the Aug. 20 report. Investors are expected to focus on U.S. comparable sales, advertising expansion, income from memberships, and operating expense efficiency.
Risks: If pharmacy profitability declines, or if consumer headwinds or sluggish digital earnings persist, Walmart’s valuation may come under pressure. Shares dropped 7.3% following May’s results, a bigger decrease than options markets had anticipated.
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