Major Wall Street brokerages are advising investors to capitalize on Walmart’s steepest stock drop in four years, maintaining that the retail giant’s long-term growth story remains intact.
- Walmart shares plunged over 9% after reporting its slimmest U.S. same-store sales growth since early 2020.
- Federal regulations on drug pricing and broader macroeconomic pressures contributed to lower price targets across Wall Street.
- Major investment firms, including JPMorgan and Bank of America, reiterated “Buy” ratings, framing the sell-off as an attractive entry point.
Walmart Inc. (WMT) shares extended declines by 0.7% on Friday after its latest quarterly earnings release pushed shares to their worst one-day decline since May 2022. However, few Wall Street firms are looking at it as a buying opportunity.
The sell-off was triggered by a noticeable deceleration in U.S. same-store sales, which grew by just 2.6% for the quarter ending in July. Analysts attributed the sluggish growth to federal regulations under the Biden administration that lowered drug prices, along with persistent pressure from elevated fuel costs and cautious consumer sentiment.
Despite the market’s negative reaction, Wall Street’s broader consensus remains overwhelmingly positive. Out of 41 analysts covering the company, 34 maintain a “Buy” or “Strong Buy” rating, as per data from Koyfin.
JPMorgan’s WMT View
JPMorgan analyst Christopher Horvers advised clients to view the sharp market sell-off as a prime buying opportunity, asserting that the heavy selling pressure has run its course.
“We are buyers — we view wash out as done as bears got their price and trends should improve while alternate profit pools accelerated,” Horvers wrote in a research note.
Horvers described the bearish thesis against Walmart as overly pessimistic and noted that skeptics are ignoring historical trends regarding price investments and long-term elasticity. He emphasized that Walmart’s core long-term revenue drivers remain intact, predicting that buy-side earnings estimates will eventually rise.
What BofA Said
Bank of America analyst Christopher Nardone echoed a bullish sentiment, describing the stock’s retreat as a “compelling opportunity” for long-term investors to acquire shares in a secular market leader. Nardone maintained a “Buy” rating on the company while lowering his price target to $126 from $144.
Nardone noted that while the slowdown in same-store sales was disappointing, the market’s reaction was amplified by Walmart’s previously high valuation. The stock had fallen roughly 23% from its record high of $134.20 set in May.
Bank of America highlighted several bright spots within the earnings report, including strong performance in e-commerce and a sequential acceleration in Sam’s Club U.S. same-store sales to 4.4%. Nardone added that management’s decision to raise second-half guidance—even while taking on an estimated $2 billion in extra fuel expenses—demonstrates strong internal confidence in capital investments and future returns.
WMT Stock: Retail View
Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘high’ message volumes. Retail chatter around the stock has intensified, with message volume up 1,500% over the past session.
One user explored building a position on Walmart stock.
View this Stocktwits post
WMT stock has lost 7.8% year-to-date. The SPDR Dow Jones Index (DIA) has gained 9.3% during the same period.