Walmart (WMT, Financial) stock surged by 4.29% today, reaching a price of $97.69. The significant movement was triggered by an analyst upgrade from Mike Pohn at DZ Bank, who shifted his rating on Walmart from hold to buy and set a price target of $110 per share. This price target suggests a 13% increase from its recent closing price. This upgrade came shortly after Walmart released its fiscal 2025 results.
For the fourth quarter, Walmart (WMT, Financial) reported a 4% year-over-year revenue increase to nearly $181 billion and a 10% rise in non-GAAP EPS to $0.66. Both metrics surpassed consensus estimates. Despite this strong performance, Walmart's fiscal 2026 adjusted EPS projection of $2.50 to $2.60 came in below the average analyst estimate of $2.77.
In terms of valuation, Walmart's GF Value rates the stock as significantly overvalued with a GF Value of $58.8 (GF Value). The current market capitalization of Walmart stands at $784.78 billion, and the stock's P/E ratio is 40.54, which indicates a potentially high valuation compared to the industry. Additionally, Walmart's Price to Book ratio is hovering near a 10-year high at 8.62, suggesting that investors are paying a premium relative to the company's book value.
Despite these valuation concerns, Walmart (WMT, Financial) demonstrates financial strength with a strong Altman Z-score of 6.19 and a high Piotroski F-Score of 8, indicating a very healthy financial position. The company's operating margin is also expanding, which is a positive sign for profitability. However, potential investors should note the warning signs such as insider selling, with 11 insider selling transactions recorded over the past three months.
Overall, while Walmart's recent stock performance and analyst upgrades present a bullish outlook, investors should consider the valuation metrics and overall financial health when making investment decisions.
