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Investing.com - Walmart (NYSE:WMT), the $780 billion retail giant currently trading near its 52-week high, saw its shares decline Thursday despite raising its full-year guidance, as quarterly earnings fell short of analyst expectations due to higher claims costs. According to InvestingPro data, the company maintains a strong financial health score of GOOD, despite trading at elevated valuation multiples.
Raymond (NSE:RYMD) James maintained its Outperform rating and $105.00 price target on Walmart following the company’s fiscal second-quarter 2026 results. The retailer reported earnings per share of $0.68, below the consensus estimate of $0.73, primarily due to approximately $450 million in higher-than-expected claims costs impacting quarterly EBIT. InvestingPro analysis shows the company’s robust revenue of $685 billion over the last twelve months, with a healthy gross profit margin of 24.9%.
Walmart U.S. comparable sales growth excluding fuel reached 4.6%, surpassing consensus expectations of 3.4%, with balanced contributions from transactions (+1.5%) and ticket size (+3.1%). The company demonstrated continued strength in high-margin growth areas, with advertising revenue increasing 46% including VIZIO, membership income rising 15%, and global e-commerce growing 25%.
Despite the earnings miss, Walmart raised its full-year guidance for both top-line growth and earnings per share, partly due to favorable foreign exchange conditions. The retailer has gained market share across all income cohorts while driving profitable omnichannel growth throughout its business.
Raymond James noted that when excluding the approximately $730 million in year-to-date higher claims costs, Walmart’s underlying results reinforce the fundamental investment case, with EBIT growth exceeding comparable currency sales growth and favorable mix shifts in advertising, marketplace, and membership supporting long-term margin expansion opportunities. InvestingPro subscribers can access 13 additional key insights about Walmart, including its 30-year dividend growth streak and comprehensive financial health metrics in the Pro Research Report, available exclusively on the platform.
In other recent news, Walmart reported its second-quarter fiscal 2025 earnings, revealing adjusted earnings per share of $0.68, which fell short of several analysts’ expectations. Despite this, the company achieved a revenue of $177.4 billion, surpassing market forecasts. Analysts from Goldman Sachs, Morgan Stanley (NYSE:MS), Evercore ISI, DA Davidson, and Truist Securities have all reiterated their positive ratings on Walmart, underscoring the retailer’s strong revenue performance. Goldman Sachs maintained a Buy rating with a $101 price target, while Morgan Stanley kept an Overweight rating with a $115 target, citing robust top-line growth. Evercore ISI reiterated an Outperform rating with a $110 target, noting a slight miss in earnings expectations. DA Davidson and Truist Securities also maintained Buy ratings with price targets of $117 and $111, respectively, emphasizing Walmart’s continued strong sales performance. Truist Securities highlighted a 4.6% increase in U.S. comparable sales and robust growth in Sam’s Club and international operations. These developments reflect the retailer’s solid market position despite some profit shortfalls.
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