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Walmart Stock at 36.5X P/E: Smart to Hold or Time to Sell?
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Key Takeaways
Walmart trades at a 36.5X forward P/E, above industry and sector averages, underscoring investor confidence.
Expanding e-commerce, automation and advertising drive Walmart's earnings growth potential.
Analysts have raised near-term estimates as Walmart posts 5.6% sales growth and stronger digital performance.
Walmart Inc. (WMT - Free Report) continues to command investor confidence, as reflected in its forward 12-month P/E ratio of 36.49, higher than the industry average of 33.45 as well as the broader Zacks Retail–Wholesale sector’s 24.50. This premium valuation highlights the market’s belief in the company’s growth potential, operational resilience and strategic transformation.
WMT’s Valuation Versus Industry
Image Source: Zacks Investment Research
Backed by its expanding e-commerce network, automation initiatives and advertising momentum, the retail giant is increasingly being viewed as a high-quality, lower-risk player in a volatile consumer landscape. The elevated multiple signals that investors expect WMT to keep delivering steady earnings growth and stronger margins as it reshapes retail through its scale, technology investments and innovative strategies.
WMT Stock Performance
Walmart shares have risen 8.5% in the past three months compared with the industry’s gain of 8% and the broader sector’s 2.5% increase. Meanwhile, the S&P 500 is up as much as Walmart in the same time frame. The omnichannel retailer has outpaced peers such as Kroger (KR - Free Report) , Costco (COST - Free Report) and Target (TGT - Free Report) , which declined 3.7%, 5.7% and 13.7%, respectively, in the past three months.
WMT Price Performance vs. Industry, S&P 500 & Sector
Image Source: Zacks Investment Research
Closing the trading session at $102.90 on Wednesday, WMT stock stands just about 3% below its 52-week high mark of $106.11 attained on Sept. 17, 2025. A solid value proposition, broad omnichannel presence, and continued market share gains across grocery and health & wellness categories have been supporting the growth story of this Bentonville, AR-based company.
Walmart: Building Strength Through Scale and Strategy
Walmart’s diverse business model is a major advantage. The company generates growth not only from stores but also through digital advertising, memberships and marketplace operations. These areas provide new profit streams that are less dependent on traditional retail sales. Advertising through Walmart Connect and international platforms like Flipkart Ads is growing quickly, while membership income from Walmart+ and Sam’s Club is rising at a double-digit pace.
Walmart’s progress in digital and logistics capabilities has also been impressive. The company uses its massive store network as fulfillment hubs, allowing it to deliver faster and more efficiently. Marketplace growth and greater use of Walmart Fulfillment Services are strengthening both customer convenience and profitability. Management is also investing heavily in automation and artificial intelligence to improve productivity and simplify shopping experiences. The company’s international operations add another source of growth. Markets like China, Mexico and India (Flipkart) continue to post double-digit gains, driven by strong e-commerce demand and expansion in quick delivery services.
In the second quarter of fiscal 2026, Walmart’s broad strategy delivered solid results. Total revenues rose 5.6% in constant currency or cc, with gains across all major segments. Comparable sales in Walmart U.S. were up 4.6%, supported by grocery strength, mid-teens growth in health & wellness and a rebound in general merchandise. Sam’s Club delivered nearly 6% comp growth, while international sales jumped 10.5%, led by a strong 30% increase in China, and continued progress in Mexico and Flipkart. Digital sales remained a bright spot, growing 25% globally and 26% in Walmart U.S., fueled by faster store-based deliveries.
That said, Walmart continues to face cost headwinds. The company absorbed about $450 million in additional liability expenses during the second quarter, while higher wages and technology investments pressured margins. A higher mix of grocery and health & wellness sales (which generally carry lower margins) further constrained profit growth. External factors, including tariffs and currency fluctuations, also add uncertainty to margin protection amid efforts to maintain pricing.
Nonetheless, management expects operating income to rise faster than sales for the full year, backed by cost efficiencies and growth in higher-margin businesses. For fiscal 2026, WMT expects consolidated net sales growth of 3.75-4.75% at cc. Adjusted operating income is expected to increase 3.5-5.5% at cc. Walmart anticipates adjusted earnings per share (EPS) for fiscal 2026 in the $2.52-$2.62 range. The guidance suggests growth from the adjusted EPS of $2.51 recorded in fiscal 2024.
How Are Estimates Stacking Up for WMT?
Analysts have grown more upbeat about Walmart’s near-term outlook, with earnings estimates for the current and next fiscal quarters moving higher over the past 60 days. This positive revision trend reflects confidence in the company’s ability to sustain growth.
Image Source: Zacks Investment Research
Takeaways for Walmart Investors
Walmart’s strong execution, strategic investments and expanding digital capabilities continue to fortify its leadership in retail. The company’s premium valuation appears justified by its consistent earnings growth, operational scale and diversified profit drivers. While a focus on efficiency, technology and customer value positions Walmart well for steady long-term growth, cost pressures and macro uncertainties pose concerns for the near term. All said, Walmart appears to be a solid choice for long-term investors while warranting caution in the short term. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Walmart Stock at 36.5X P/E: Smart to Hold or Time to Sell?
Key Takeaways
Walmart Inc. (WMT - Free Report) continues to command investor confidence, as reflected in its forward 12-month P/E ratio of 36.49, higher than the industry average of 33.45 as well as the broader Zacks Retail–Wholesale sector’s 24.50. This premium valuation highlights the market’s belief in the company’s growth potential, operational resilience and strategic transformation.
WMT’s Valuation Versus Industry
Image Source: Zacks Investment Research
Backed by its expanding e-commerce network, automation initiatives and advertising momentum, the retail giant is increasingly being viewed as a high-quality, lower-risk player in a volatile consumer landscape. The elevated multiple signals that investors expect WMT to keep delivering steady earnings growth and stronger margins as it reshapes retail through its scale, technology investments and innovative strategies.
WMT Stock Performance
Walmart shares have risen 8.5% in the past three months compared with the industry’s gain of 8% and the broader sector’s 2.5% increase. Meanwhile, the S&P 500 is up as much as Walmart in the same time frame. The omnichannel retailer has outpaced peers such as Kroger (KR - Free Report) , Costco (COST - Free Report) and Target (TGT - Free Report) , which declined 3.7%, 5.7% and 13.7%, respectively, in the past three months.
WMT Price Performance vs. Industry, S&P 500 & Sector
Image Source: Zacks Investment Research
Closing the trading session at $102.90 on Wednesday, WMT stock stands just about 3% below its 52-week high mark of $106.11 attained on Sept. 17, 2025. A solid value proposition, broad omnichannel presence, and continued market share gains across grocery and health & wellness categories have been supporting the growth story of this Bentonville, AR-based company.
Walmart: Building Strength Through Scale and Strategy
Walmart’s diverse business model is a major advantage. The company generates growth not only from stores but also through digital advertising, memberships and marketplace operations. These areas provide new profit streams that are less dependent on traditional retail sales. Advertising through Walmart Connect and international platforms like Flipkart Ads is growing quickly, while membership income from Walmart+ and Sam’s Club is rising at a double-digit pace.
Walmart’s progress in digital and logistics capabilities has also been impressive. The company uses its massive store network as fulfillment hubs, allowing it to deliver faster and more efficiently. Marketplace growth and greater use of Walmart Fulfillment Services are strengthening both customer convenience and profitability. Management is also investing heavily in automation and artificial intelligence to improve productivity and simplify shopping experiences. The company’s international operations add another source of growth. Markets like China, Mexico and India (Flipkart) continue to post double-digit gains, driven by strong e-commerce demand and expansion in quick delivery services.
In the second quarter of fiscal 2026, Walmart’s broad strategy delivered solid results. Total revenues rose 5.6% in constant currency or cc, with gains across all major segments. Comparable sales in Walmart U.S. were up 4.6%, supported by grocery strength, mid-teens growth in health & wellness and a rebound in general merchandise. Sam’s Club delivered nearly 6% comp growth, while international sales jumped 10.5%, led by a strong 30% increase in China, and continued progress in Mexico and Flipkart. Digital sales remained a bright spot, growing 25% globally and 26% in Walmart U.S., fueled by faster store-based deliveries.
That said, Walmart continues to face cost headwinds. The company absorbed about $450 million in additional liability expenses during the second quarter, while higher wages and technology investments pressured margins. A higher mix of grocery and health & wellness sales (which generally carry lower margins) further constrained profit growth. External factors, including tariffs and currency fluctuations, also add uncertainty to margin protection amid efforts to maintain pricing.
Nonetheless, management expects operating income to rise faster than sales for the full year, backed by cost efficiencies and growth in higher-margin businesses. For fiscal 2026, WMT expects consolidated net sales growth of 3.75-4.75% at cc. Adjusted operating income is expected to increase 3.5-5.5% at cc. Walmart anticipates adjusted earnings per share (EPS) for fiscal 2026 in the $2.52-$2.62 range. The guidance suggests growth from the adjusted EPS of $2.51 recorded in fiscal 2024.
How Are Estimates Stacking Up for WMT?
Analysts have grown more upbeat about Walmart’s near-term outlook, with earnings estimates for the current and next fiscal quarters moving higher over the past 60 days. This positive revision trend reflects confidence in the company’s ability to sustain growth.
Image Source: Zacks Investment Research
Takeaways for Walmart Investors
Walmart’s strong execution, strategic investments and expanding digital capabilities continue to fortify its leadership in retail. The company’s premium valuation appears justified by its consistent earnings growth, operational scale and diversified profit drivers. While a focus on efficiency, technology and customer value positions Walmart well for steady long-term growth, cost pressures and macro uncertainties pose concerns for the near term. All said, Walmart appears to be a solid choice for long-term investors while warranting caution in the short term. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.