Walmart Sell-Off May Be an Opportunity for Investors

Walmart's recent sell-off may be an opportunity for investors, according to analysts. The company's stock price fell by 12% after it beat earnings expectations and raised full-year guidance. However, this reaction seems overdone, with the current price of $105.09 implying a 15.17% upside over the next 12 months.

The Q2 FY27 report showed adjusted EPS of $0.81 versus $0.7413 expected and revenue of $187.94 billion, up 5.94% year over year. Despite this, shares fell by 9.15% on the earnings report. WMT is down 6.64% over the past week and 12.03% since May 21.

The two issues that drove the reaction were Q3 guidance coming in soft at $0.62 to $0.64 adjusted EPS, due to tariff refund benefits being reinvested into price rollbacks, and a 125 basis point pharmacy headwind from Maximum Fair Pricing regulation. Reddit sentiment framed WMT's weakest sales growth in six years as a warning sign.