Walmart Inc. (WMT) Stock Analysis — Price Target, Reduce Rating & DCF Valuation (2026)
WMT screens as lower-quality and fully priced — current price implies a 27% premium to DCF fair value.
WMT's quantitative grade is Reduce, with limited downside risk (CVaR -5.3%), and quality metrics (net margin 3%, ROE 22%). Walmart Inc. (WMT) trades at $130.93 with a valuation grade of Reduce: a trailing P/E of 47.7x at a 99% premium to sector median, net margins of 3.1%, a DCF-implied intrinsic range of $59–$133 suggesting a -27% margin of safety, beta 0.65 (defensive risk profile).
DCF Valuation Range
Key Takeaways
- Valuation: Reduce grade — P/E 47.7x — DCF range $59–$133 implies -27% margin of safety
- Risk: CVaR -5.3% (95th percentile, 1-month) indicates moderate tail exposure; beta of 0.65 amplifies broad market moves in both directions
- Strengths: Size 5.0/5, 3% net margin, 22% ROE dominate the factor profile
- Watch: Value score of 2.0/5 signals premium pricing
Quantitative Factor Profile
Key Metrics
| Metric | Value |
|---|---|
| Current Price | $130.93 |
| P/E Ratio (TTM) | 47.7x |
| Forward P/E | 39.6x |
| P/S Ratio | 1.5 |
| EV/EBITDA | 25.0 |
| Beta | 0.65 |
| Net Margin | 3.1% |
| ROE | 21.8% |
| Debt/Equity | 64.4% |
| Dividend Yield | 0.76% |
| CVaR (95%, 1M) | -5.3% |
| Market Cap | $1.04T |
WMT shows mixed quality signals in the factor model, at a fully-priced valuation with limited margin of safety. Three of the last four quarters beat consensus — execution is solid.
WMT trades at 47.7x trailing earnings — 99% above the Consumer Defensive sector median of 24.0x. This combination — premium multiple, decelerating outperformance — is historically where risk/reward becomes asymmetric. Not a reason to sell; a reason to size carefully. The current price implies a 27% premium to DCF fair value — the risk/reward depends entirely on above-consensus growth materialising.
The rating on WMT is driven by a factor profile that is genuinely mixed — there is no clean narrative here, which is itself a signal worth taking seriously. What I pay attention to above all else is the earnings surprise trajectory. The beat streak is intact, but the magnitude has compressed from +5.6% to +1.8% — and at a 48x multiple, the market is not pricing in a miss. That asymmetry is worth respecting. The scenario that changes my read is a genuine valuation reset — not a small pullback, but a re-rating that reflects the actual risk profile. Until that happens, the risk/reward is not there.
Earnings History
| Quarter | EPS Est. | EPS Actual | Surprise |
|---|---|---|---|
| Q1 2026 | $0.73 | $0.74 | +1.8% ✓ |
| Q4 2025 | $0.60 | $0.62 | +3.1% ✓ |
| Q3 2025 | $0.74 | $0.68 | -8.0% ✗ |
| Q2 2025 | $0.58 | $0.61 | +5.6% ✓ |
Quarterly EPS — Estimate vs Actual
Earnings Projections
| Quarter | EPS Est. | YoY EPS | Analysts |
|---|---|---|---|
| Q2 2026 | $0.75 | +23.5% | 41 |
| Q3 2026 | $0.80 | +18.3% | 41 |
| Q4 2026 | $0.91 | +46.1% | 41 |
| Q1 2027 | $0.82 | +11.2% | 41 |
Earnings Projections — Consensus EPS Estimates
WMT vs. Sector Peers
| Ticker | P/E (TTM) | Fwd P/E | Beta | CVaR-95 | Net Margin |
|---|---|---|---|---|---|
| WMT | 47.7x | 39.6x | 0.65 | -5.3% | 3.1% |
| COST | 52.5x | 44.9x | 0.91 | -6.8% | 3.0% |
| PG | 21.5x | 20.7x | 0.40 | -12.0% | 19.2% |
| KO | 24.8x | 22.7x | 0.36 | -5.8% | 27.8% |
| HD | 22.6x | 19.7x | 1.00 | -14.8% | 8.6% |
DCF Scenario Analysis
Hover each scenario for detail · current price $130.93Pairwise Correlation Matrix
Extended Analysis — Buy, Hold or Sell? Risk Factors. Portfolio Fit.
Is WMT a buy, hold, or sell?
WMT carries a valuation grade of Reduce. The trailing P/E of 47.7 sits 99% above the Consumer Defensive sector median of 24.0x — a premium that demands sustained earnings delivery. Our discounted cash flow model produces an intrinsic range of $59–$133 — implying a -27% margin of safety at the current price of $130.93. The width of the DCF range reflects genuine uncertainty in the terminal growth rate assumption: the correct framework is a probability-weighted distribution over scenarios, not a single point estimate. See the DCF valuation framework for full methodology.
The company has beaten estimates in 75% of recent quarters. The most recent quarter delivered a 1.8% earnings surprise. Analyst estimate revisions are trending upward.
What are WMT's key risk factors?
With a beta of 0.65, WMT exhibits a defensive risk profile relative to the broad market. The 95th-percentile CVaR of -5.3% on a one-month horizon should inform position sizing directly: at a 10% portfolio weight, this tail event contributes approximately 0.5% of total portfolio loss in the worst 5% of months. Net margins of 3.1% fall below the Consumer Defensive sector average of 12%, suggesting margin pressure. Return on equity of 21.8% suggests solid capital efficiency. The balance sheet is conservatively leveraged at 64% debt-to-equity.
A put/call ratio of 0.92 indicates roughly balanced sentiment in the options market. Implied volatility of 3.8% is below realized volatility of 20.1%, potentially making options relatively cheap. Insiders have been net sellers to the tune of $3014.4M recently. While routine dispositions are common, the magnitude bears watching. Short interest is low at 1.6% of float, suggesting limited bearish conviction.
How does WMT fit in a diversified portfolio?
At typical HENRY portfolio weights — 10–20% of the equity allocation — WMT carries a beta of 0.65, meaning it amplifies broad market moves proportionally. The appropriate weight is not a function of conviction alone, but of the full covariance structure across all holdings. See the Ledoit-Wolf covariance framework for the methodology behind these calculations.
Among closely correlated names, WMT shows the strongest co-movement with COST (0.57), HD (0.35), PG (0.33). Investors seeking diversification should note these correlation dynamics when constructing multi-asset portfolios.
True portfolio risk is a function of the full covariance structure across all holdings — not individual stock metrics. The Portfolio Health Check quantifies this at the portfolio level: it surfaces hidden concentration, marginal CVaR contributions, and the degree to which your overall allocation deviates from an optimal risk-adjusted mandate. The WMT analysis here is a single node in that larger structure.
Investor FAQ
Is WMT a buy or sell in 2026?
Walmart Inc. (WMT) carries a Reduce quantitative rating from A.L. Capital Advisory, derived from Discounted Cash Flow intrinsic value analysis, five-factor model scoring (Value, Quality, Momentum, Volatility, Size), and CVaR tail risk measurement. At $130.93, the DCF midpoint margin of safety is -27% (intrinsic value range: $59 bear – $133 bull). Composite factor score: 3.3/5. Strongest factor: Size (5.0/5). Weakest factor: Value (2.0/5). Trailing P/E: 47.7x. Rating by Anton Ladnyi, CFA Charterholder (ex-Goldman Sachs Equity Research, ex-J.P. Morgan Wealth Management), A.L. Capital Advisory, Berlin. Full methodology: Portfolio Construction Framework →
What is the average analyst target price for WMT?
Wall Street consensus target for WMT: $136.68 (+4.4% upside from the current price of $130.93). The analyst target range spans $62.00 (most bearish) to $150.00 (most bullish). Consensus recommendation: Strong Buy. Note that analyst price targets typically reflect a 12-month forward horizon and are derived from a blend of DCF, comparable-company, and sum-of-the-parts analysis. A.L. Capital Advisory’s quantitative Reduce rating is produced independently — from DCF intrinsic value, five-factor model scores, and CVaR tail risk — and does not mechanically track Street consensus. When the two diverge, the divergence itself is informative: it can reflect differences in time horizon, valuation methodology, or the degree to which the current price already discounts the consensus case. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Monte Carlo Simulation Framework →
How does WMT score on Value, Quality, Momentum, Volatility, and Size?
WMT five-factor scores (A.L. Capital Advisory, 1–5 scale): Value 2.0/5 (below average) — measures current price versus DCF intrinsic range and trailing earnings multiples; Quality 2.0/5 (below average) — captures profitability metrics including return on equity, net margin (ROE: 21.8%) and net margin (3.1%); Momentum 3.0/5 (neutral) — reflects recent price trajectory and earnings surprise consistency; Volatility 4.5/5 (strong) — inverse measure derived from beta, where lower historical volatility earns a higher score; Size 5.0/5 (strong) — market capitalisation rank (mega-cap $1T+ scores 5/5). Composite: 3.3/5. Factor scores above 4.0 signal a tailwind in that dimension; below 2.0 signals a material headwind. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Black-Litterman Model →
What is WMT's tail risk and CVaR?
The 95th-percentile Conditional Value at Risk (CVaR) for WMT on a one-month horizon is -5.3%. CVaR represents the expected average loss in the worst 5% of monthly outcomes — a more conservative tail risk measure than standard VaR, which only marks the loss threshold. Beta of 0.65 indicates below-market volatility. For reference, a diversified S&P 500 ETF carries a one-month CVaR of roughly -8% to -12% in normal market conditions; individual equity CVaR is higher due to idiosyncratic risk. At the portfolio level, what matters is the marginal CVaR contribution of each holding — not its standalone figure. The A.L. Capital Advisory Portfolio Health Check quantifies each position's marginal tail-risk contribution across your entire holdings. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: CVaR & Tail-Risk Methodology →
What is WMT's intrinsic value and DCF price target?
A.L. Capital Advisory's DCF model produces an intrinsic value range of $59 (bear case) to $133 (bull case) for Walmart Inc. (WMT). At $130.93, the midpoint margin of safety is -27% (positive = discount to intrinsic mid; negative = premium). The bear-to-bull spread reflects genuine sensitivity to the two dominant DCF inputs: the terminal growth rate and WACC. Terminal value typically accounts for 60-80% of total intrinsic value in most equity DCF models, which is why a range is more analytically sound than a point estimate. The central analytical question is not what the DCF outputs as a single number but which growth trajectory the current market price already discounts. All DCF analysis follows CFA Institute standards and is conducted by Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework →
What would trigger a rating upgrade or downgrade for WMT?
Upgrade trigger: Upgrade to Strong Buy on evidence of accelerating earnings surprise magnitude combined with improvement in the Value factor score — specifically if the current 47.7x P/E is supported by an upward revision to DCF terminal growth assumptions. Downgrade trigger: Continued earnings misses or deteriorating balance sheet quality reducing the Quality factor score below 2.0/5. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Investment Policy Statement Framework →
Does WMT consistently beat earnings estimates?
WMT has beaten consensus EPS estimates in 75% of tracked quarterly periods — indicating consistent delivery. The most recent reported quarter beat consensus by 1.8%. Sustained above-consensus delivery supports both the Momentum and Quality factor scores and provides a tailwind to the current rating. Earnings surprise magnitude and direction are incorporated into the Momentum and Quality dimensions of the five-factor scoring model. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework →
How does WMT contribute to portfolio risk and diversification?
WMT carries a beta of 0.65 (low-volatility / defensive relative to the broad equity market). A beta above 1.0 means the position amplifies market moves in both directions at a typical portfolio weight. Strongest peer co-movement: COST (0.57), HD (0.35), PG (0.33). Holding WMT alongside these names in the same portfolio increases concentration risk. True portfolio risk is a function of the full covariance structure — a single stock's beta does not reveal its marginal contribution to portfolio tail loss. The A.L. Capital Advisory Portfolio Health Check quantifies concentration risk (Herfindahl-Hirschman Index), pairwise correlations, and marginal CVaR contribution across all your holdings. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Ledoit-Wolf Covariance Framework →
What quantitative methodology does A.L. Capital Advisory use to analyse WMT?
A.L. Capital Advisory analyses Walmart Inc. (WMT) using a four-component quantitative framework grounded in CFA Institute standards. (1) DCF Valuation: projects free cash flows under bear and bull assumptions, discounts at WACC to produce an intrinsic value range with margin-of-safety calculation. (2) Five-Factor Scoring: each equity is scored 1–5 on Value, Quality, Momentum, Volatility, and Size. (3) CVaR Tail Risk: 95th-percentile Conditional Value at Risk from historical simulation of daily returns on a one-month horizon. (4) Earnings Surprise Analysis: quarterly beat rate and magnitude are incorporated into the Momentum and Quality factor scores. The current Reduce rating for WMT is the output of applying this complete framework to current data. All analysis is conducted personally by Anton Ladnyi, CFA Charterholder (ex-Goldman Sachs Equity Research, ex-J.P. Morgan Wealth Management), founder of A.L. Capital Advisory, Berlin. CFA Charter: https://credentials.cfainstitute.org/5ff4f4bf-f1e6-4ca7-9ab2-aaed50ec2e43 Full methodology: DCF Valuation Framework → · CVaR & Tail-Risk Methodology →
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This analysis is produced using a systematic quantitative framework applied to market data and does not constitute investment advice. Prose commentary is AI-assisted and generated from structured quantitative inputs. All data and metrics are as of 2026-05-08 and are point-in-time estimates subject to revision without notice. CVaR figures are based on historical simulation and do not guarantee future outcomes. DCF ranges and upgrade/downgrade triggers are forward-looking statements based on current assumptions and may not materialise. Past performance does not guarantee future results. This analysis does not account for individual circumstances, tax position, or investment objectives — consult a qualified financial advisor before making investment decisions. This content is intended for informational purposes only and does not constitute regulated investment advice under MiFID II or FCA guidelines. This content is not intended for US persons or residents of jurisdictions where its distribution would be contrary to local law or regulation. This service is not directed at residents of Finland, Sweden, Norway, Denmark, Iceland, or Poland. The author may hold long or short positions in securities mentioned in this analysis. Nothing on this page represents a solicitation to buy or sell any security. A.L. Capital Advisory is an independent private advisory practice and is not affiliated with Walmart Inc.
