- Walmart tops $1 trillion valuation as shares hit record highs.
- Elevated valuation leaves the stock vulnerable to earnings disappointment.
- E-commerce, automation, and pricing power strengthen the long-term growth story.
Under CEO John Furner, has crossed a market value of $1 trillion, becoming only the 12th company in the US to reach that level. Its shares closed at record highs last week, extending a strong rally. Upcoming quarterly results could support further gains if they clearly beat expectations.
If the results fall short, the stock may see a pullback, especially since some valuation models suggest it is trading more than 26% above fair value. Investors will also focus on the company’s outlook for both physical stores and e-commerce. Analyst expectations remain mixed, with a similar number of upward and downward estimate revisions.
E-Commerce Strength Gains Momentum at Walmart
Walmart is the world’s largest retailer, built on a vast store network, low prices, and a growing online business. E-commerce has become a much bigger part of its revenue since the pandemic, as more customers shifted to digital shopping. A key focus has been delivering everyday essentials at competitive prices. That pricing strength has helped the company attract shoppers during periods of high inflation, when many households looked for cheaper options.
The company is also investing in automation and artificial intelligence to improve logistics and support its expanding online operations. These upgrades aim to make supply chains faster and more efficient. In addition, a large share of Walmart’s products are sourced within the US, which lowers exposure to tariff risks. Together, these factors support a steady outlook for the business in the coming quarters.
Market May Punish Walmart on Weak Results
While the medium and long term outlook remains positive, the upcoming results will play a key role in sustaining the current rally. With the stock trading at around 45 times earnings, expectations are high, and even a small disappointment could trigger a pullback.
Valuation models add to that risk. InvestingPro’s fair value estimate suggests the shares may be overvalued by roughly 26 to 27 percent, which could give investors a reason to lock in gains if results fail to impress.
Looking at results from recent quarters, a downside surprise would not be unusual. In similar situations before, the market has responded with declines of around 5 to 6 percent, showing that investors tend to react quickly when expectations are missed.
Walmart Pulls Back From Record High
After buyers pushed the stock above its previous record high near $135 per share, the price has started to pull back. So far, the correction has been limited and remains contained within the recent trading range.
The closest support level to watch is around $127 per share. If the price falls below that zone, it could pave the way for a move toward the $121 area, where horizontal support, the rising trend line, and the recent pullback level come together.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.
