Walmart Just Announced Its Triple Holiday Event. Investors Are Betting The Holidays Will Pave The Path To $1 Trillion For the Stock
Walmart's stock is closing in on a $1 trillion market cap, and the company just dropped a three-event holiday sales calendar to get there. But a strategy built on aggressive price cuts carries a profit risk that could make or…
Walmart (NASDAQ:WMT | WMT Price Prediction) announced three holiday shopping events on Oct. 26, with its stock close to a $1 trillion market value. As of 10:25 a.m. ET, shares traded at $121.59. That was up 1.42% on the day, 10.01% over the past month and 9.83% year to date, for a market value of about $966.67 billion.
Investors may be counting on a strong holiday season to carry Walmart past $1 trillion. Available sources link the rally to other factors. TIKR attributes the move to investors paying a higher valuation multiple, and TipRanks linked the Oct. 22 gain to comments from an Oppenheimer analyst. That puts a lot of weight on the holidays, because a richer valuation needs profit growth to back it up.
Three Holiday Sales Built Around Lower Prices
Walmart’s holiday calendar, per its press release:
- Early Black Friday Deals: Nov. 12 to 15
- Black Friday: Nov. 23 to 29. Both Black Friday sales open online at 12:01 a.m. ET and in stores at 6 a.m. local time.
- Cyber Monday: Nov. 30 to Dec. 2, online only
Walmart said Walmart+ members get early access to hot deal drops for the first 24 hours of each Black Friday sale. Walmart’s own research found that 60% of shoppers say gift prices affect how they feel about the season, and Walmart said 70% say lower prices would make holiday shopping easier. Walmart is also promoting its new Walmart+ and Sam’s Club Plus bundle at $120 a year. Walmart’s Top Toys list includes 25 toys priced under $25.
Julie Barber, chief merchandising officer for Walmart U.S., summed up the pitch: “It’s all about helping our customers save more, discover more and make more room for what matters.”
A Higher Multiple Drove the Rally
TIKR data shows Walmart closed at $119.89 on Oct. 23, up 15.4% from $103.92 on Sept. 30. Over that period, TIKR shows analysts’ next-12-months earnings estimate stayed at $3.00 a share. The forward price-to-earnings ratio, which measures what investors pay for each dollar of profit expected over the next year, rose from about 35 times to about 40 times, per TIKR. In other words, investors paid more for the same expected earnings. TIKR puts the Street’s mean price target at $127.48, about 6% above the Oct. 23 close.
Why Price Cuts Can Squeeze Profit
Walmart has been putting its gains back into prices. Management said Walmart qualified for about $2.9 billion in tariff refunds and is using much of that money to fund more than 11,000 rollbacks. CEO John Furner said, “We’re investing heavily in price because customers need us to and because we believe it drives market share gains over time.”
TIKR names the main risk: if Walmart keeps reinvesting in lower prices, earnings could fall short. Oppenheimer’s Rupesh Parikh rates the stock Perform. According to TIKR, citing TipRanks, he said the bundle strengthens Walmart’s value proposition but noted a near-term profit headwind.
Higher-margin businesses help cover that cost. In the second quarter of fiscal 2027, global advertising rose 38% and membership fee revenue grew 17%. Adjusted EPS came in at $0.81, beating the $0.74 estimate, according to Walmart’s earnings release filed with the SEC. Even so, the stock fell 9.15% on the day of that report.
Nov. 19 Falls Between the Two Black Friday Sales
Walmart’s next report is expected on Nov. 19, though the company has not made that date official. That falls between its two Black Friday sales. The report covers the fall quarter, and holiday-quarter results won’t come until early next year, so Nov. 19 will give investors their first look at Walmart’s holiday outlook.
Walmart forecast to adjusted EPS of $0.62 to $0.64 for the quarter, and TIKR puts the year-earlier figure at $0.62 and the consensus estimate at $0.64. TIKR says results at or above consensus, along with Walmart’s full-year range of $2.80 to $2.87 held or raised, would support the higher multiple. A result at the low end of guidance would mean a stock TIKR values near 40 times forward earnings had reported flat quarterly earnings.
What to Watch Before the Holidays
- The Nov. 19 report, and any update to Walmart’s holiday outlook and full-year guidance
- How deep Walmart’s holiday discounts go, and whether management says they are weighing on margins
- Whether Walmart’s $120 bundle brings in new members, since membership fees help offset lower prices
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AJ spent 10 years writing about financial markets at The Motley Fool. His coverage centers on technology stocks and the broader macroeconomic trends, from interest rates to geopolitics, that shape where markets are headed next. AJ is drawn to the stories where big-picture economics and individual companies collide.
