Walmart Valuation Concerns Loom Ahead of Q2 Earnings Report

Walmart Inc's (WMT) fiscal Q2 earnings report is due on August 20, and its valuation remains a concern ahead of the release. Globalt Investments' portfolio manager Keith Buchanan views WMT shares as a 'valuation concern' due to their high price-to-earnings ratio of nearly 40x.

This makes Walmart more expensive than top AI stocks like Nvidia, which trades at about 25x forward earnings. The derivatives market agrees with Buchanan's caution, with the put-to-call ratio on option contracts expiring at the end of this week sitting at 2.53, indicating a strong bearish skew.

The lower price on those contracts is set at $112, signaling potential for over 4% decline in Walmart stock immediately after reporting earnings.