Walmart's Stock Is Down 19% From Its High. Is It Too Late to Buy or Right on Time?
2026-07-27 12:32
•Lawrence Rothman, Cfa •The Motley Fool
••• • Axe Capital view
Walmart’s Drop: Overpriced or Opportunity?
Walmart’s shares have fallen 19% but remain costly compared to growth prospects.
Walmart’s stock has taken a notable hit, down 19% from its recent peak. While the 4.1% same-store sales growth and hefty 280 million weekly shoppers show the company’s core business is humming, the price still looks steep. Trading on a P/E of 39 versus the S&P 500 average of 28, the market seems to expect Walmart to sprint where it's more likely to jog. For South African investors, this isn’t just a US retail story. A strong dollar and elevated USD/ZAR currently add extra currency risk to any dollar exposure. Also, local consumer stocks like Shoprite or Woolworths exhibit more attractive valuations and better alignment with our domestic market cycles. Walmart’s size and reach are impressive, but the valuation implies growth that's probably unrealistic. If you want exposure to global retail, think about waiting for a better entry point or focus on local counters benefiting from South Africa’s recovery. this is just my opinion and not financial advice
Avoid Walmart at these levels. Instead, watch Shoprite and Woolworths for more reasonable valuations and direct exposure to South African consumer trends.
- Walmart (WMT)
- Shoprite
- Woolworths
- USD/ZAR
- US inflation impacting Walmart’s growth
- Rand volatility amplifying currency risk
6/10
Walmart's stock has dropped 19% from its mid-May high to $109.45, resulting in a lower P/E ratio of 39 (down from 48). While the company demonstrates strong operational execution with 4.1% same-store sales growth and 280 million weekly shoppers, the analyst argues the stock remains overvalued relative to its growth prospects. With a P/E multiple of 39 versus the S&P 500's 28, the market is pricing in high growth that Walmart may struggle to deliver, leading to a recommendation to pass on the stock.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Lawrence Rothman, Cfa
Categories: Consumer, Retail, Equities
Tickers: WMT
Sentiment: Negative - Despite strong operational metrics (4.1% comp sales growth, 280M weekly shoppers, market share gains), the analyst recommends passing on the stock due to overvaluation. The P/E ratio of 39 is significantly higher than the S&P 500 average of 28 and above Walmart's 10-year median of 31, suggesting the market is pricing in growth expectations that the company may not meet. The analyst notes Walmart's 'fast-growth days are likely behind it,' indicating limited upside potential at current valuations.
Keywords: retail stocks, valuation, same-store sales, omnichannel retail, market share, P/E ratio, stock decline
Insights:
- WMT: Negative: Despite strong operational metrics (4.1% comp sales growth, 280M weekly shoppers, market share gains), the analyst recommends passing on the stock due to overvaluation. The P/E ratio of 39 is significantly higher than the S&P 500 average of 28 and above Walmart's 10-year median of 31, suggesting the market is pricing in growth expectations that the company may not meet. The analyst notes Walmart's 'fast-growth days are likely behind it,' indicating limited upside potential at current valuations.