New York, Feb 20, 2026, 18:39 EST — After-hours
- Walmart stock dropped roughly 1.5% to $122.99 late Friday, extending a two-day decline following its earnings report.
- HSBC downgraded Walmart to “hold,” citing valuation concerns following the retailer’s cautious FY27 guidance.
- Walmart is projecting adjusted EPS for FY27 to land between $2.75 and $2.85, and the retailer also rolled out a fresh $30 billion buyback authorization.
Walmart shares dropped 1.5% to $122.99 in after-hours trading Friday, with the stock sliding further after the company flagged a cautious profit outlook. That was compounded by a new analyst downgrade.
This shift is notable: Walmart often serves as an early signal for the state of U.S. household finances. So when the retail giant turns more cautious, investors start to wonder if consumers are opting for cheaper options or just pulling back altogether—and what that could mean for retail margins.
The stock caught attention as the broader market ended up, lifted by a Supreme Court ruling scrapping a major set of Trump-era tariffs. That move dialed back trade-policy uncertainty. Investors, for their part, kept sorting through softer growth numbers alongside persisting signs of inflation.
HSBC cut Walmart to a “hold” from “buy” but bumped its price target up to $131, compared with $122 previously, arguing that the stock’s premium limits upside if anything goes wrong. “It is hard to see a marked deterioration in the trading environment,” analysts Joe Thomas and Guilherme Domingues wrote, although they noted Walmart’s valuation gap with Costco is narrowing. Investing.com
Walmart reported Thursday that fourth-quarter revenue climbed 5.6% to $190.7 billion, with adjusted earnings per share coming in at $0.74, according to an SEC filing. Looking ahead, the retailer projects adjusted EPS for fiscal 2027 between $2.75 and $2.85. Net sales are expected to grow 3.5% to 4.5% in constant currency, not factoring in exchange-rate changes. The company also authorized a fresh $30 billion share buyback. The “adjusted” figures strip out certain items, such as fluctuations in equity and other investments, the filing added. SEC
CEO John Furner told analysts that lower-income customers are still feeling squeezed. For shoppers making under $50,000, “wallets are stretched,” he said. Still, U.S. comparable sales—excluding fuel—were up 4.6%, and online sales in the U.S. jumped 27%. David Silverman, analyst at Fitch, noted that Walmart’s size lets it “capitalize on e-commerce growth,” as competitors like Target have had trouble getting shoppers back for higher-priced items. Reuters
The situation can change fast. Should hiring soften or costs spike anew—tariffs, shipping, wages—Walmart’s reputation for low prices might not be enough to cushion its discretionary sales. In that case, it’s the stock’s valuation investors need to watch, not its upside.
Walmart’s board signed off on a 5% bump to the annual dividend, now set at $0.99 per share for fiscal 2027, with quarterly payouts of $0.2475. “We’re proud to be increasing our annual dividend for the 53rd consecutive year,” said CFO John David Rainey. March 20 is the next record date, and shareholders get paid April 6. Walmart News
Next week, the market focus will be on whether investors view the guidance as deliberately conservative or as a genuine warning on consumer demand. Buybacks are also on the radar, with traders watching to see how soon they start moving the tape. Macro-exposed retail stocks have another test coming up with the Federal Reserve’s policy meeting on March 17–18.
