Walmart (WMT) is set to report its fiscal 2027 second-quarter earnings on Aug. 20, and one analyst thinks the retail giant might just be ready to dust off its old beat-and-raise playbook. That's the word from Bank of America Securities analyst Christopher Nardone, who's sticking with a Buy rating and a $144 price target ahead of the print.
The thesis? Even if U.S. comparable sales are cooling off, especially among lower-income shoppers, the digital engine and fatter margins could keep the numbers looking sharp. Nardone's note suggests that the market might be underestimating the power of Walmart's online and advertising businesses to offset any softness in the core store traffic.
Beat-and-Raise Still on the Table
BofA is modeling second-quarter adjusted earnings of 74 cents per share, but they've trimmed their U.S. comparable sales forecast (excluding fuel) to 3.5% from 4%. That might sound like a red flag, but the analyst crunched the numbers: every 50-basis-point shortfall in Q2 comps would only shave about 10 basis points off full-year net sales growth. Not exactly a catastrophe.
Walmart's own guidance calls for constant-currency net sales growth of 4% to 5% in Q2, down from 5.7% in Q1. BofA is looking for 4.6%. The slowdown, they say, is due to the end of tax-refund benefits, less help from general merchandise pricing, and some belt-tightening among lower-income consumers. But here's the kicker: strength elsewhere could still let Walmart beat expectations and nudge its outlook higher.
Price Cuts as a Market-Share Weapon
Walmart's July 6 price investments are a key part of the story. Nardone expects these cuts to help the retailer grab market share in the second half of the year, especially with a bigger Marketplace assortment and faster delivery in the mix. The good news? These investments were already baked into Walmart's guidance, so they shouldn't create any extra margin risk.
Looking ahead, tariff-related refunds could be a margin headwind next year as Walmart laps those benefits. But high-growth, high-margin businesses like advertising could help fund further price investments. It's a virtuous cycle: lower prices bring in more shoppers, which boosts ad revenue, which funds more price cuts.
Digital Becomes the Profit Engine
The analyst is also shining a spotlight on Walmart's digital businesses as an increasingly important part of the investment case. Global advertising revenue grew 36% in Q1, while Marketplace sales jumped nearly 50%. Membership fee revenue is also holding up well. BofA thinks e-commerce and these alternative revenue streams could improve profitability even if core U.S. comparable sales stay in that 3% to 4% range.
For the full fiscal year, BofA is forecasting adjusted earnings of $2.90 per share, ramping up to $3.20 in fiscal 2028 and $3.53 in fiscal 2029. They're also looking for revenue of about $753.42 billion in fiscal 2027.
The $144 price target is based on 45 times the firm's fiscal 2028 adjusted earnings estimate. That premium reflects expectations for positive U.S. comparable sales, continued market-share gains, and operating income growth running at nearly twice the pace of sales growth. In other words, Walmart isn't just a retailer anymore; it's a growth story with a dividend.
What Other Analysts Are Saying
Walmart carries a consensus Buy rating with an average price target of $141.11. Recent analyst moves include:
- RBC Capital Markets: Outperform, $137 price target on Aug. 12.
- Oppenheimer: Upgraded to Perform on Aug. 4.
- Bernstein: Outperform, lowered target to $142 from $145 on July 31.
- BTIG: Buy, $145 price target on June 8.
- Tigress Financial: Buy, raised target to $155 from $150 on May 29.
- UBS: Buy, lowered target to $141 from $147 on May 22.
- BNP Paribas: Outperform, lowered target to $146 from $147 on May 22.
Q2 Earnings Preview
Wall Street is looking for adjusted earnings of 74 cents per share, up from 68 cents a year ago. Revenue is expected to climb to $186.77 billion from $177.40 billion. Investors will be watching margins, consumer demand, and comparable sales closely. Walmart's ability to protect profitability while keeping traffic flowing could be the deciding factor in how the market reacts.
Valuation adds to the pressure. Walmart trades at about 39.9 times earnings, which leaves little room for disappointment. A weak print or a cautious outlook could hit the stock hard.
Earnings History: A Mixed Bag
Walmart has beaten earnings estimates in two of the past four quarters, with an average earnings surprise of negative 0.9%. In the most recent quarter, reported May 21, Walmart posted earnings of 66 cents per share, matching estimates. Revenue of $177.75 billion topped the $174.75 billion estimate.
On Feb. 19, Walmart reported earnings of 74 cents per share, beating the 73-cent estimate. Revenue of $190.70 billion also beat expectations of $189.18 billion. But on Aug. 21, 2025, Walmart missed on earnings, posting 68 cents per share versus the 74-cent estimate, even though revenue of $177.40 billion beat the $174.80 billion forecast.
The pattern suggests Walmart's revenue has been more consistent than its earnings. That puts the spotlight on margins and forward guidance when the retailer reports its latest quarter.
WMT Price Action: Walmart shares were up 1.93% at $115.45 at the time of publication on Wednesday.
