Key Takeaways for Walmart Stock as of May 2026
- Fuel Cost Absorption: Walmart absorbed $175 million, about 250 basis points of operating income growth, in unplanned fuel costs during Q1 FY27 and still posted adjusted operating income growth of roughly 5% in constant currency, matching guidance.
- Guidance Held: Management reiterated full year guidance of 3.5% to 4.5% constant currency sales growth and 6% to 8% operating income growth, with Q2 EPS guided to $0.72 to $0.74.
- Margin Mix Inflection: Merchandise category mix turned positive for Walmart U.S. gross margin for the first time in 18 quarters, adding 29 basis points, while eCommerce grew 26% and marketplace sales climbed close to 50%.
- Rainey On Earnings Mix: CFO John Rainey said advertising and membership now comprise roughly a third of Walmart’s earnings, a structural shift he called very different from Walmart a decade ago.
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Walmart Stock Slides as Commerce Solutions Hit a Third of Operating Income
Walmart (WMT) told investors on its fiscal first quarter call that advertising and membership fees combined now generate close to a third of total operating income, a mix shift that barely existed a decade ago. The company absorbed $175 million in unplanned fuel costs during the quarter and still delivered adjusted operating income growth of roughly 5% in constant currency, in line with guidance. That combination, rising costs met with steady profit growth, is the detail the market has not fully credited yet.
CFO John Rainey laid out the shift directly on the call: “When you take categories like membership, categories like advertising, those 2 combined comprise roughly 1/3 of our earnings today. That’s very different from Walmart of 10 years ago.” He tied the durability of that mix to insulation from swings in fuel prices and freight costs, the very pressures that dented the quarter’s headline numbers.
The other piece of the story sat quietly inside the gross margin line. Rainey called out that merchandise category mix turned positive for Walmart U.S. gross margin for the first time in 18 quarters, adding 29 basis points, as general merchandise and fashion outgrew lower-margin grocery and health categories. U.S. eCommerce incremental margins reached about 12% in the period, and marketplace sales in the U.S. grew close to 50%.
None of this shows up as a single headline figure investors can trade on, but together it describes a retailer whose profit engine is shifting away from thin grocery margins and toward advertising, membership, and marketplace take rates that scale without matching capital spend. That shift, not any single quarter’s comp number, is what should be repricing Walmart stock right now. Consensus already models that shift continuing, with Walmart’s EBITDA estimates set to reaccelerate toward 11% growth by July 2027.
Walmart Stock Drawdown Deepens Even as Wall Street Sees 26% Upside
Walmart stock hit a 19% max drawdown on July 23, 2026, and closed the next session still down 18% from that same peak, meaning the stock has barely recovered from its worst stretch of the year. That drawdown widened even as commerce solutions margin mix improved through the first quarter, a gap between what the business delivered and how the market priced it.
Meanwhile, Wall Street has not lost conviction on Walmart stock through that slide.
Coverage splits into 28 buy ratings, 9 outperforms, 5 holds, 1 no-opinion call, and 1 sell, a lopsided tilt toward bullish that has held steady across the last several quarters of target revisions. The mean target sits at $138, up from $110 a year earlier, and implies 26% upside from the current $109 close. Targets have climbed even as the stock itself has not, a divergence that puts the burden on the next few quarters to close.
TIKR Values Walmart Stock at $149, Pricing In the Margin Mix Shift
TIKR’s mid case model values Walmart stock at $149, realized around early 2031, implying a 36% total return from the current price of $109, or 7% annualized over roughly 4.5 years.
That annualized rate reads modest next to high-growth retail names, but it comes from a company with an $800 billion-plus market cap where single-digit compounding on that base still moves real dollars, and it arrives without needing multiple expansion to work. The model is pricing steady execution, not a re-rating.
Walmart stock reaching that target depends on the same shift already visible in the first quarter: commerce solutions holding near a third of operating income and merchandise mix continuing to add to gross margin rather than subtract from it. Neither trend needs to accelerate from here, it needs to persist, and the 18-quarter gap before mix turned positive suggests the move, once started, tends to hold.
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Should You Invest in Walmart Inc.?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Walmart Inc. stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Walmart Inc. alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
