Walmart just delivered a mixed bag to Wall Street.
Despite growing revenue and profits, the mega-retailer's stock fell more than 9% after its recent quarterly results.
Shortly after, JPMorgan Chase adjusted the price target for Walmart (WMT).
Walmart Stock Price Target Lowered to $125
At the time of writing, Walmart stock trades around $104. With a market capitalization of $825 billion, shareholders have seen total returns exceeding 400% over the past decade on a dividend-adjusted basis.
This strong decade-long performance has placed the stock at a price-to-earnings ratio of 35 times expected earnings, a significant premium for a company forecast to grow profits at a compound annual rate of 8.7% over the next five years.
By comparison, Walmart's 10-year average P/E ratio is much lower, at 25 times.
According to Investing.com:
JPMorgan lowered its price target on Walmart to $125 from $137 while maintaining an 'overweight' rating on the blue-chip stock.
The bank had already cut its same-store sales estimate for Walmart three weeks before the earnings release. The actual reported figures came in below even those lowered expectations.
Analysts described the pre-earnings landscape as 'muddled,' with various moving parts making the stock's trajectory difficult to predict.
Why Walmart Stock is Under Pressure
Walmart's health and wellness business weighed on revenue and margins in Q2 of fiscal 2027 (ending July).
Walmart CFO John David Rainey told analysts on the company's fiscal 2027 Q2 earnings call that new Maximum Fair Pricing regulations reduced total comparable sales by 125 basis points for the quarter, worse than the 100-basis-point hit the company had planned for at the start of the year.
Walmart U.S. same-store sales grew 2.6% for the quarter. Excluding the impact from the health and wellness business, that number looks much healthier, closer to the 3% to 4% growth range the company has maintained for the past two-and-a-half years.
