WMT changes
Pick any two versions below to diff them.
- Price
- $125.52 → $125.67(+0.1%)
- Next earnings is estimate
- Yes → No
- Thesis
- Walmart trades at a premium because investors pay for steady growth that now comes with higher margins. Store traffic and eCommerce keep growing, and advertising, membership fees and the marketplace earn more profit per dollar of sales than groceries. In Q2 fiscal 2027, global advertising grew 38%, membership fee revenue grew 17% and eCommerce sales grew 23%. Investors also see Walmart as a safe stock when consumers spend less, because shoppers move to low prices. The price assumes that earnings grow much faster than sales for many years. For the premium to be earned, three things must be true. Adjusted operating income must keep growing faster than sales after the one-time tariff refunds of about $2.9 billion in Q2 fiscal 2027 pass. Advertising and membership must keep growing near their recent rates, so that the operating margin moves up each year. Capital spending of about 4% of net sales must turn into higher returns, with return on investment above the 15.4% of the 12 months to July 2026. The first test is the Q3 fiscal 2027 removed: report, expected added: report on November 19, 2026, against guidance of adjusted EPS of $0.62 to $0.64. The full-year report and the fiscal 2028 guidance in February 2027 give the second test. If margins stop rising, the premium can get smaller over the next one to two years.
- Checkpoints
- Nov 19, removed: 2026 (estimate): added: 2026: Q3 fiscal 2027 results: margins after tariff refunds. Pending. Watch: Adjusted EPS at or above $0.62 to $0.64, adjusted operating income growth of 2% or more and steady advertising growth pass; a lower fiscal 2027 guidance or falling U.S. comparable sales fail. Feb removed: 2027 (estimate): added: 18, 2027: Fiscal 2027 results and fiscal 2028 guidance. Pending. Watch: Fiscal 2028 guidance with adjusted operating income growing faster than sales passes; guidance with flat margins or lower returns on capital fails.