Why the Walmart Dip Is the Best Buying Opportunity of 2026

By Trey Thoelcke Published May 28, 11:35AM EDT

Why the Walmart Dip Is the Best Buying Opportunity of 2026 — © 24/7 Wall t.

Walmart (NYSE: WMT | WMT Price Prediction) trades near $118, against a Wall Street average price target of $137.81, leaving roughly 16.8% of implied upside on the table.

The gap opened quickly. The retailer reported Q1 FY2027 results before the open last week, beat on the top line, reiterated full-year guidance, and watched its stock slide anyway. For a name anchoring many retirement portfolios as a defensive consumer staple, the reversal drew attention.

Walmart is the world’s largest retailer, and the bull thesis has shifted from same-store traffic to higher-margin commerce: advertising, marketplace, membership, and a digital flywheel that now contributes meaningfully to operating income. The gap between price and target implies that the market is suddenly skeptical of that story.

A 9.7% Drop on a Quarter That Actually Beat

The damage was concrete. From a filing-day close of $131.30, shares fell 8.4% within a day and finished the week at $118.54, off 9.7%. Over the same five sessions, SPY rose 1.0%.

The headline numbers were solid. Revenue of $175.68 billion grew 6.08% year over year beat by 0.48%. Adjusted EPS of $0.66 came in line with estimates. The problem lay beneath. Higher fuel costs created roughly a 250 basis point drag on operating income growth, free cash flow swung to negative $1.95 billion on capex up 34%, and global inventory rose 8.9%.

Q2 adjusted EPS guidance of $0.72 to $0.74 landed soft against buyside expectations. A premium-multiple consumer staple needs clean prints, and this one had asterisks.

Why the Sell-Side Is Sticking With the Story

Analysts are anchored on the “second P&L”: high-margin businesses growing on top of the retail core. Global eCommerce sales grew 26% and now represent 23% of total net sales. Global advertising revenue rose 37%, marketplace sales jumped nearly 50% (the best in 10 quarters), and membership fees climbed 17.4%. These lines carry materially better margins than groceries.

The store side held firm. Walmart U.S. comp sales rose 4.1% ex-fuel with broad-based share gains, especially among upper-income households. General merchandise posted its strongest share gains in five years. CEO John Furner pointed to “better shopping experiences, a broader assortment, and faster delivery” as the recipe.

The ratings skew constructive. Almost all of 43 covering analysts recommend buying shares. Raymond James reiterated Buy with a target implying about 16% upside, and UBS trimmed its target to $141 from $147 but maintained its constructive long-term stance.

The Math Underneath the Dislocation

As mentioned, the average analyst target of $137.81 implies almost 17% upside from the current price, and analysts ratings lean heavily toward Buy. The share price is 6.4% higher year to date, and the S&P 500 has gained 10.1% over the same stretch. The aforementioned one-week slide of 9.7% converted a market-beating year into a laggard. Longer term, shares are up 21.9% over one year and 150.3% over five.

Valuation remains the rub. The trailing P/E is 42 and forward P/E is 41. That is a rich multiple for a low-single-digit operating-margin retailer, even one with a high-margin digital business inside it.

The Verdict

The bull case has merit if the second P&L thesis holds. Advertising up 37%, marketplace up 50%, and membership up 17.4% are mix-shift inputs that bend the operating margin curve over time. Combine that with a $30 billion buyback authorization and management repurchasing in Q1 at an average $125.51, well above today’s price, and the company is voting with capital.

The bear case is harder to dismiss if these headwinds compound. A forward multiple of 41 leaves zero room for Q2 to disappoint. Fuel pressure, the 100-basis-point Maximum Fair Pricing headwind in Health & Wellness, IEEPA tariff uncertainty, aggressive price cuts from Kroger, and inventory up 8.9% argue this multiple compresses before it expands.

The selloff trimmed over 9% off a business that grew revenue 6%, raised the dividend to $0.99 annualized, and held its full-year line. The risk/reward is workable for patient investors, but Q2 is the next gate, and the multiple gives no margin for error.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.