Key Takeaways
- Bank of America maintains Buy rating on Walmart while adjusting price target down to $144 from $150
- The revised target suggests 18.7% potential upside from current levels around $121
- Walmart elevated its fiscal year net sales outlook to the upper end of 3.5%–4.5% growth expectations
- First-quarter sales climbed 7.3% to $177.8 billion; worldwide e-commerce surged 26%
- Shares fell 8.1% following earnings release and started Wednesday trading at $118.57
Bank of America continues to back Walmart despite recent market turbulence.
Christopher Nardone, an analyst at the firm, maintained his Buy recommendation on Walmart (WMT) shares while adjusting the price objective downward to $144 from a previous $150. Based on the $121.34 reference price in the firm’s analysis, this represents approximately 18.7% potential appreciation.
WMT began Wednesday’s session at $118.57. The shares have retreated considerably from their 12-month peak of $135.15, with the 8.1% post-earnings decline accounting for a substantial portion of that drawdown.
The first-quarter performance was actually robust. Revenue reached $177.75 billion, representing a 7.4% year-over-year increase and exceeding the $174.84 billion analyst consensus. Earnings per share totaled $0.66, matching expectations precisely.
Worldwide e-commerce expanded 26%, and Walmart elevated its annual net sales forecast to the upper boundary of its 3.5%–4.5% constant-currency projection. Second-quarter guidance anticipates 4%–5% revenue growth.
What triggered the selloff? Rising expenses. Leadership highlighted approximately $1 billion in additional freight and fuel costs, and the full-year operating profit growth forecast of 6%–8% fell short of some optimistic projections. UBS similarly reduced its price objective following the earnings announcement.
Bank of America’s Investment Thesis
Bank of America’s fundamental premise centers on Walmart’s competitive advantage during periods of consumer restraint. When shoppers become more budget-conscious, they gravitate toward value-oriented retailers — precisely where Walmart excels.
The investment bank notes that Walmart is “playing offense,” with price rollbacks increasing 20% year over year during the first quarter. Analysts anticipate Walmart will be among the last major retailers to implement price hikes should fuel expenses drive inflation higher during the latter half of the year.
Bank of America also highlighted Walmart’s diversified revenue channels — including advertising, marketplace commissions, and membership subscriptions — as protective factors for profit margins. These higher-margin operations have become increasingly central to the investment narrative.
The firm noted that fiscal 2026 provides Walmart with a proven framework for managing cost pressures. During that period, the company navigated over $1 billion in challenges from claims expenses and tariffs while still achieving 5.4% constant-currency operating income growth.
Strong Institutional Ownership Continues
King Luther Capital Management expanded its Walmart holdings by 8.8% during the fourth quarter, acquiring 113,952 additional shares to reach a total position of 1,415,423 shares, valued at approximately $157.7 million.
Other institutional activity showed varying patterns. Tennessee Valley Asset Management boosted its stake by 466.6% in Q3. Fox Run Management and Life Cycle Investment Partners both initiated fresh positions.
Institutional investors and hedge funds collectively control 26.76% of outstanding WMT shares.
Regarding insider transactions, Director C. Douglas McMillon divested 19,416 shares at $132.21 on April 23rd, while EVP John Rainey sold 20,000 shares at $127.79 during March. Cumulative insider sales over the past 90 days totaled 126,008 shares valued at roughly $15.9 million.
Wall Street’s consensus rating stands at “Moderate Buy” with a mean price objective of $138.71. The analyst community includes thirty-one Buy ratings, two Strong Buy recommendations, and three Hold ratings.
Walmart’s fiscal 2027 EPS projection ranges from $2.75 to $2.85, with second-quarter guidance spanning $0.72 to $0.74.
The retail giant is also scheduled to enter the top 10 constituents of the Russell 3000 index during the June 2026 rebalancing.
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