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Walmart Posts Q4 Beat, Shares Tank On Disappointing Guidance: Analysts Highlight One-Time Items
WMTWalmart(WMT) Benzinga·2025-02-21 17:54

Core Viewpoint - Walmart Inc reported strong fiscal fourth-quarter results, but shares declined due to disappointing full-year guidance that fell short of investor expectations [1][3][12] Financial Performance - Adjusted earnings for the fiscal fourth quarter were 66 cents per share, beating the consensus estimate of 65 cents per share, driven by higher-than-expected revenues and gross margins [2] - Revenues reached 180.6billion,surpassingStreetexpectationsof180.6 billion, surpassing Street expectations of 180.1 billion, with US comparable sales growth of 4.6% compared to the consensus of 4.4% [3] - Full-year earnings guidance is set at 2.50−2.50-2.60 per share, indicating only 2% growth at the midpoint and falling short of the consensus estimate of 2.77pershare[4]MarketPositionandStrategy−Walmartcontinuestogainmarketshareacrossvariousproductcategories,supportedbystrongvalueanddigitalconvenience[6]−Thecompanyisenhancingitsofferingsthroughremodels,onlineSKUexpansion,andexpressdeliverycapabilities,whichareexpectedtodriveunitstrengthandparticipationinWalmart+[7]−Marketsharegainsareparticularlynotableamongupper−incomehouseholds,withsolidsign−uptrendsforWalmart+[8]AnalystRatingsandPriceTargets−KeyBancCapitalMarketsraiseditspricetargetfrom2.77 per share [4] Market Position and Strategy - Walmart continues to gain market share across various product categories, supported by strong value and digital convenience [6] - The company is enhancing its offerings through remodels, online SKU expansion, and express delivery capabilities, which are expected to drive unit strength and participation in Walmart+ [7] - Market share gains are particularly notable among upper-income households, with solid sign-up trends for Walmart+ [8] Analyst Ratings and Price Targets - KeyBanc Capital Markets raised its price target from 100 to 105whilemaintaininganOverweightrating[10]−PiperSandlercutitspricetargetfrom105 while maintaining an Overweight rating [10] - Piper Sandler cut its price target from 118 to 114butkeptanOverweightrating[10]−RBCCapitalMarketsreduceditspricetargetfrom114 but kept an Overweight rating [10] - RBC Capital Markets reduced its price target from 109 to 107whilereaffirminganOutperformrating[10]−BofASecuritiesmaintainedaBuyratingwithapricetargetof107 while reaffirming an Outperform rating [10] - BofA Securities maintained a Buy rating with a price target of 120 [10] - Goldman Sachs reaffirmed a Buy rating with a price target of 106[10]−RaymondJamesmaintainedanOutperformratingwithapricetargetof106 [10] - Raymond James maintained an Outperform rating with a price target of 115 [10] Future Outlook - Analysts suggest potential upside to fiscal 2026 expectations due to higher-margin revenue streams and improving eCommerce economics, despite the full-year guidance missing expectations [12] - Management's operating income guidance for fiscal 2026 suggests 5%-7% growth, which is higher than the average of 4%-6% over the past two years, indicating a positive outlook for earnings growth [9]