Walmart Investors Riled by Dismal 2025 Outlook
Walmart (WMT) investors suffered a major setback on Thursday, with shares plummeting 6.23% in their worst performance in over a year. The decline follows an unexpectedly weak 2025 outlook from the retailer, leaving investors disillusioned.
Strong Past, Uncertain Future
During much of 2024, Walmart consistently exceeded analyst expectations and raised guidance. This impressive performance pushed shares to a premium valuation, with a P/E ratio of 37, significantly higher than the S&P 500's 22.
Tariff and Consumer Spending Concerns Loom
However, Walmart's profit outlook has been marred by concerns over tariffs and consumer spending. The company projected full-year EPS in the range of $2.50 to $2.60 per share, falling short of analysts' estimates of $2.76.
CFO Reassures Investors
Despite the sell-off, Walmart CFO John David Rainey has attempted to reassure investors. He stated that the company is "not immune" to tariffs but will take steps to minimize their impact on consumer prices.
Wall Street Remains Cautiously Optimistic
Following the sell-off, analysts have largely maintained their bullish sentiment on Walmart's stock. EPS estimates have trended downward but remain above the company's guidance.
Analyst Commentary
* Citi: Reiterated Buy rating, Price Target $120. "Walmart continues to gain market share and is well-positioned in the current environment."
* Jefferies: Reiterated Buy rating, Price Target $120. "Walmart is the value leader in retail and will continue to benefit from consumer trade-down and private label growth."
* JPMorgan: Reiterated Overweight rating, Price Target $112. "Walmart controls the margin throttle and the company's long-term prospects remain intact."