Walmart Faces Multiple Analyst Target Cuts After 9% Selloff

WMT fell 9.2% after its second-quarter report, and the research community responded with a broad round of price-target cuts even while largely keeping buy-side ratings intact. Goldman Sachs cut its target to $130 from $141 and BofA moved to $126, both maintaining Buy. Baird's Peter Benedict cut to $120 from $140 while keeping an Outperform rating, BTIG's Robert Drbul went to $140 from $145 with a Buy, and DA Davidson adjusted to $132.

The pattern is unusual and worth reading carefully: almost no one downgraded the rating, they downgraded the price. That combination says analysts still believe in the franchise but no longer believe in the multiple it was carrying into the print. Walmart beat on earnings and raised its full-year guidance, yet U.S. same-store sales slowed from the first quarter to the weakest pace in years, and pricing changes in health and wellness muddied the comp.

Wolfe Research framed the quarter as a disappointment specifically on the comp trajectory rather than on profitability, and Piper Sandler cut on comp headwinds. The Wall Street Journal's framing is that Walmart is playing a long game by investing in lower prices, which compresses near-term margin in exchange for share. Both readings can be true, and that is exactly why the targets moved while the ratings did not.

Watch three things into the third quarter: whether U.S. comps stabilize once the health and wellness pricing change annualizes, how much of the tariff refund flows into further price investment versus margin, and whether the gap between the low target on the street near $120 and the high near $140 narrows as the price-investment strategy either shows up in traffic or does not.

Related Stocks

• WMT