Walmart’s digital transformation and durable scale support the business, but a 36.1x P/E leaves limited upside when mature-store growth slows and tariff-driven margin gains normalize.
Overview
Walmart is the world’s largest traditional retailer, serving approximately 280 million customers and members weekly across 19 countries. FY2026 revenue reached **$713.2 billion**, led by Walmart U.S. at 68% of sales, International at 19%, and Sam’s Club U.S. at 13%. Grocery and consumables represented nearly 60% of Walmart U.S. revenue, providing defensiveness, while e-commerce, marketplace fees, memberships, fulfillment services, and retail advertising are shifting the mix toward higher-margin income. Global e-commerce reached $150.4 billion, or 23% of sales, and advertising approached $6.4 billion after 46% FY2026 growth. Q2 FY27 revenue rose 5.9% to $187.94 billion and adjusted EPS increased 19.1% to $0.81, beating the $0.74 consensus, prompting management to raise FY27 sales and adjusted EPS guidance. However, Q3 adjusted EPS guidance of $0.62-$0.64 is below the $0.68 consensus, domestic transaction growth slowed to 1.5%, and tariff refunds drove much of the margin expansion. Shares fell to $103.32, while the 36.1x P/E remains premium. The five-year probability-weighted target is $96.25, implying limited downside-adjusted return despite strong business quality.