By Anton Ladnyi, CFA · ex-Goldman Sachs · ex-J.P. MorganPublished Updated
WMT — Walmart at ~$119 on ~44x forward P/E with Q1 FY2027 (ended April 30) revenue $177.8B (+7.3% cc), US comp +4.1%, global eCommerce +26%, advertising +37%, membership +17.4%; FY2027 EPS guidance $2.75-2.85 reaffirmed; the advertising and membership re-rating thesis is the core bull case at an expensive valuation.
WMT Price Target & Rating
WMT's grade is Reduce, with moderate downside risk (CVaR -10.1%), and quality metrics (net margin 3%, ROE 24%). Walmart Inc. (WMT) trades at $120.59 with a valuation grade of Reduce: a trailing P/E of 42.3x at a 76% premium to sector median, net margins of 3.1%, a DCF-implied intrinsic range of $66–$137 suggesting a -16% margin of safety, beta 0.60 (defensive risk profile).
DCF Valuation Range
Key Takeaways
Valuation: Reduce grade — P/E 42.3x — DCF range $66–$137 implies -16% margin of safety
Risk: CVaR -10.1% (95th percentile, 1-month) indicates moderate tail exposure; beta of 0.60 amplifies broad market moves in both directions
Strengths: Size 4.5/5, 3% net margin, 24% ROE dominate the factor profile
Catalyst: Advertising revenue crossing $10B annualised; eCommerce segment reporting its first profitable quarter; FY2027 guidance raised
Why ReduceModestly above estimated intrinsic value — risk/reward skewed to the downside at current price; watch for a pullback to the Hold boundary
Main riskPremium multiple (42.3x P/E) demands consistent delivery
Tail riskCVaR -10.1% over one month at the 95th percentile
DCF range$66–$137 intrinsic range; margin of safety -16%
Best useCore mega-cap Consumer Defensive holding — not a source of diversified sector exposure
Next watchEarnings surprise deceleration trend — monitor next quarter delivery closely
Quantitative Factor Profile
Value
2.0 / 5
Quality
2.0 / 5
Momentum
3.0 / 5
Volatility
4.5 / 5
Size
4.5 / 5
Key Metrics
WMT Key Metrics — Walmart Inc. 2026
Metric
Value
Current Price
$120.59
P/E Ratio (TTM)
42.3x
Forward P/E
36.7x
PEG Ratio
1.89x
P/S Ratio
1.3
EV/EBITDA
23.0
Beta
0.60
Net Margin
3.1%
ROE
24.1%
Debt/Equity
74.8%
Dividend Yield
0.82%
CVaR (95%, 1M)
-10.1%
Market Cap
$959.7B
Analyst View
Anton Ladnyi, CFA · A.L. Capital AdvisoryUpdated 2026-06-11
Rating Rationale
WMT — Walmart at ~$119 on ~44x forward P/E with Q1 FY2027 (ended April 30) revenue $177.8B (+7.3% cc), US comp +4.1%, global eCommerce +26%, advertising +37%, membership +17.4%; FY2027 EPS guidance $2.75-2.85 reaffirmed; the advertising and membership re-rating thesis is the core bull case at an expensive valuation.
Investment Thesis
↑ Bull Case
Global advertising revenue $6.4B in FY2026 (+46% YoY); Q1 FY27 advertising +37% — growing toward $8B+ run rate, representing ~1/3 of operating income at premium margins
eCommerce growing to 23% of US sales with improving profitability; automation investment peaking, operating leverage ahead
Middle-income trade-down during economic uncertainty drives share gains; Walmart historically strengthens in recessionary periods
Membership (Walmart+, Sam's Club): growing double-digits with high retention; structural high-margin recurring revenue layer
↓ Bear Case
44x forward P/E is among the highest in Walmart's history; FY2027 EPS $2.75-2.85 was not raised despite Q1 beat — management signaling caution
Tariff/commodity cost inflation compressing merchandise margins; distribution network fuel sensitivity
Health/wellness and grocery (lower-margin categories) growing faster than GM; operating margin expansion will be gradual
Advertising growth decelerating from 46% (FY2026) to 37% (Q1 FY27) — the re-rating thesis requires sustained high-double-digit advertising growth
What Changes the Rating
↑Catalyst:Advertising CAGR sustaining above 35% through FY2028; Walmart+ membership growth above 15% for 3 consecutive quarters
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 watch on this name is earnings consistency — specifically whether delivery against consensus is stable or deteriorating. That is usually where the rating gets confirmed or challenged before the price reflects it. 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.
— Anton Ladnyi, CFA
Earnings History
WMT Earnings History — EPS Surprise Rate 2026
Quarter
EPS Est.
EPS Actual
Surprise
Q1 FY2027
$0.66
$0.66
+0.2% ✓
Q4 FY2026
$0.73
$0.74
+1.8% ✓
Q3 FY2026
$0.60
$0.62
+3.1% ✓
Q2 FY2026
$0.74
$0.68
-8.0% ✗
Quarterly EPS — Estimate vs Actual
Earnings Projections
WMT Forward EPS Consensus Estimates 2026
Quarter
EPS Est.
YoY EPS
Analysts
Q2 FY2027
$0.74
+8.8%
33
Q3 FY2027
$0.68
+10.4%
32
Q4 FY2027
~$0.82
+10.8%
39
Q1 FY2028
~$0.82
+24.2%
39
~ Estimated from annual consensus — not a direct analyst survey
WMT — P/E 42.3x · Beta 0.60 • Quantitative grade: Hold • CVaR from one-year daily history · historical simulation
DCF Scenario Analysis
Hover each scenario for detail · current price $120.59
▼
Bear Case
$86
-28.7%
Fwd P/E: 28.1x
3.0 revenue CAGR · 28.0 exit multiple
◆
Base Case
$120
-0.5%
Fwd P/E: 39.2x
7.0 revenue CAGR · 38.0 exit multiple
▲
Bull Case
$170
+41.0%
Fwd P/E: 55.5x
11.0 revenue CAGR · 50.0 exit multiple
Pairwise Correlation Matrix
0 of 10 peer pairs correlated above 0.60 — diversification benefit within this cluster is structurally limited.
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 42.3 sits 76% 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 $66–$137 — implying a -16% margin of safety at the current price of $120.59. 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.
With a 9% beat rate on recent quarters, earnings predictability has been mixed. The most recent quarter delivered a 19.0% earnings surprise. Analyst estimate revisions are trending upward.
What are WMT's key risk factors?
With a beta of 0.60, WMT exhibits a defensive risk profile relative to the broad market. The 95th-percentile CVaR of -10.1% on a one-month horizon should inform position sizing directly: at a 10% portfolio weight, this tail event contributes approximately 1.0% 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 24.1% suggests solid capital efficiency. The balance sheet is conservatively leveraged at 75% debt-to-equity.
Implied volatility of 3.1% is below realized volatility of 35.4%, potentially making options relatively cheap. Insiders have been net sellers to the tune of $3059.4M recently. While routine dispositions are common, the magnitude bears watching. Short interest is low at 1.8% 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 0.60, 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 reduceings. See the Ledoit-Wolf covariance framework for the methodology behind these calculations.
Among closely correlated names, WMT shows the strongest co-movement with COST (0.59), PG (0.29), HD (0.29). 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 reduceings — 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.
For the portfolio construction framework underpinning WMT’s position sizing and conviction rating — including IPS guardrails, Black-Litterman allocation, and CVaR constraints — see: Investment Policy Statement Framework →
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 $120.59, the DCF midpoint margin of safety is -16% (intrinsic value range: $66 bear – $137 bull). Composite factor score: 3.2/5. Strongest factor: Volatility (4.5/5). Weakest factor: Value (2.0/5). Trailing P/E: 42.3x. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Portfolio Construction Framework →
What is the average analyst target price for WMT?
Wall Street consensus target for WMT: $137.93 (+14.4% upside from the current price of $120.59). The analyst target range spans $70.00 (most bearish) to $155.00 (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: 24.1%) 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 4.5/5 (strong) — market capitalisation rank (mega-cap $1T+ scores 5/5). Composite: 3.2/5. 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 -10.1%. 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 0.60 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 $66 (bear case) to $137 (bull case) for Walmart Inc. (WMT). At $120.59, the midpoint margin of safety is -16% (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 42.3x 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 9% of tracked quarterly periods — indicating inconsistent delivery. The most recent reported quarter beat consensus by 19.0%. Below-average earnings consistency is a primary headwind to the rating and a key watch item in the quantitative model. 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 0.60 (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 (0.59), PG (0.29), HD (0.29). 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. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. 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 2026-06-11 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.
CFA Portfolio Advisory — WMT
Discuss this analysis, position sizing, or your full portfolio mandate with Anton Ladnyi, CFA.
