Walmart Stock (WMT) Reaffirmed at Buy Ahead of Earnings

Walmart Inc. is entering its fourth-quarter fiscal 2026 earnings report with renewed analyst confidence, as DA Davidson maintains its Buy rating and $135 price target on the retail giant ahead of results scheduled tomorrow (February 19). The report marks the first earnings call under newly appointed CEO John Furner, though analysts expect a steady-as-she-goes message rather than dramatic strategic shifts.

Walmart's stock trades at $127.41, 1.2% lower on the day, suggesting markets are holding steady ahead of the print. DA Davidson's reaffirmation comes with expectations that Walmart will continue its recent trajectory of market share gains, comparable sales growth in the 4%-5% range, and expanding margins driven by what the company calls its “Triple A” investment strategy: Alternative business, AI/Agentic commerce, and Automation.

Wall Street consensus points to quarterly earnings of $0.73 per share, representing a 10.6% year-over-year increase, with revenues anticipated to reach $189.99 billion, up 5.2% from the same period last year. However, UBS Group has taken a more bullish stance, projecting earnings per share between $0.75 and $0.80, well above the broader Street estimate of $0.72 to $0.73. The investment bank attributes its optimism to Walmart's robust performance across both physical retail and e-commerce channels, particularly as the company navigates a challenging macroeconomic backdrop marked by shifting consumer behavior and trade volatility.

DA Davidson acknowledges that fiscal 2026 guidance may come in below consensus expectations when management provides its outlook. The firm suggests this should not alarm markets, noting Walmart's established pattern of issuing conservative initial guidance before subsequently beating those projections throughout the year. This cautious forecasting approach has become something of a hallmark for the Bentonville-based retailer, providing management with flexibility while maintaining credibility with the Street.

The focus on Walmart's Triple A initiatives reflects the company's strategic pivot toward higher-margin revenue streams and operational efficiency. Alternative businesses encompass advertising, marketplace services, and financial products that leverage Walmart's massive customer base. AI and agentic commerce investments aim to personalize shopping experiences and streamline operations, while automation efforts target supply chain efficiency and in-store productivity gains. These initiatives collectively represent Walmart's answer to competitive pressures from Amazon and evolving consumer expectations in an increasingly digital retail landscape.

The transition to CEO Furner comes at a pivotal moment for the retailer. Walmart has successfully gained market share across income demographics, including higher-income households trading down amid persistent inflation concerns. The company's ability to maintain comparable sales growth in the 4%-5% range while expanding margins demonstrates operational leverage that few competitors can match at scale.

Markets appear positioned for a solid but unremarkable quarter, with the real focus likely to center on management's commentary regarding consumer health, inventory positioning, and the trajectory of those Triple A investments. The reaffirmation of Buy ratings and modest upside to the $135 price target from current levels suggests analysts view any near-term guidance conservatism as a buying opportunity rather than a fundamental concern.