Here’s what Wall Street experts are saying about Walmart ahead of earnings

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Thu, Feb 20, 2025, 8:10 AM 4 min read

GUIDANCE: After delivering what the company called a “strong” third quarter, Walmart raised its outlook for fiscal 2025, predicting adjusted EPS of $2.42-$2.47, up from $2.35-$2.43, on revenue up 4.8%-5.1%, an increase from prior guidance of 3.75%-4.75% growth. At the time, analysts expected EPS of $2.45, but they currently expected EPS of $2.49 on revenue of $676.78B. In November, Walmart said it had a “good” back-to-school and Halloween, and noted that the behavior of U.S. consumers was “largely consistent” over the last 4-6 quarters. As part of a broader relocation strategy unveiled in May 2024, Walmart continues to pull workers back to its main hubs in California and Arkansas while also announcing layoffs for hundreds of roles, Fox Business’s Daniella Genovese reported earlier this month, citing an internal memo.

Ahead of the earnings report, Baird raised the firm’s price target on Walmart to $115 from $100 and keeps an Outperform rating on the shares. The firm previewed its quarter where it expects solid Q4 results with momemtum poised to continue in 2025. BofA is forecasting Q4 adjusted EPS of 64c and 3.5% U.S. comp growth, noting that its comp forecast implies a deceleration from 5.3% in Q3, but adding that it sees potential for upside given the more modest deceleration in observed sales and transactions seen in Bloomberg Second Measure credit and debit card data. Citi expects the company’s Q4 earnings to beat consensus estimates and guidance. Citi models reported net sales up 3.9% verses the consensus of up 3.8%. Following management’s positive tone at ICR Conference, Citi believes Walmart’s holiday was strong, the analyst said.

SET FOR UPSIDE IN FY26: Barclays raised the firm’s price target on Walmart to $108 from $98 and keeps an Overweight rating on the shares as part of its Q4 earnings preview. The firm expects positive mid-single-digit comps and potential upside from digital growth. Walmart is set up for upside again in fiscal 2026 as the company is likely to offer a conservative starting point for guidance, the analyst tells investors in a research note.

Based on the latest Truist Card Data, the firm boosted its comps forecast for the company to up 0.5% from down 2%, noting that solid momentum has continued in Q4 from Q3, the analyst tells investors in a research note. The company’s sales trends remain robust, and Walmart continues to gain share across income cohorts due to their focus on price, convenience and assortment, which is resonating strongly with inflation-fatigued consumers, the firm states, adding that Walmart’s growing digital presence – now about $120B globally and about 18% of sales – is providing an easy gateway for higher-income consumers.

KEY CATALYST: Walmart’s Q4 print should serve as a key catalyst for the bull case on Walmart, UBS tells investors in a research note. The market is likely to focus on more dimensions of the retailer’s performance than it had in the past, and UBS believes the company’s results will live up to high expectations, though the key question is how Walmart will guide for the upcoming year.

Meanwhile, Telsey Advisory continues to expect solid business momentum and profitable share gains for the company in Q4 and 2025, the analyst tells investors. Overall, the firm expects Walmart to remain a leader and market share gainer in the retail industry. Oppenheimer believes Walmart remains well-positioned in the coming years to deliver at least 4% constant currency sales growth and 4%-8% operating income growth. Looking at the shorter-term setup, Oppenheimer sees the potential for another beat in Q4, but a likely algorithm guide for FY25. The Street is currently modeling FY25 EBIT growth of about 10% vs. management’s algorithm of essentially +4%-8%. As a result, the firm would be positioned to take advantage of any profit taking should it materialize on the upcoming report vs. playing for a positive catalyst.

NT EVENT PATH ‘UNFAVORABLE’ FOR SECTOR: Gordon Haskett said that the near-term event path for the sector remains unfavorable given that the exit rate in January was likely soft for most, the analyst tells investors in a research note. The firm also believes the upcoming spring weather outlook, the coldest in 10 years, is “precarious.” This dynamic, coupled with a high degree of tariff and interest rate uncertainty, will likely yield Q1 and 2025 guides below Street estimates, contends Gordon Haskett.

SENTIMENT: Click here to check out recent Media Buzz Sentiment on Walmart as measured by TipRanks.

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