Walmart stares at a wall of fear but fundamentals remain solid

Walmart Inc. (NYSE:WMT) stares at a wall of fear as inflationary pressures rattle the retailers. Last week, the stock plummeted 19.49%. This was after industry peers reported growth in revenues, yet the EPS seemed to decline. We find that the retailers, including Walmart, are only suffering temporarily as they try to adjust both prices and costs.

Retailers pass on inflation costs through consumer pricing. However, inflation also causes an increase in operating costs. The businesses are not able to adjust the operating costs as quickly as they can for prices. This explains why retailers are reporting lower or flat EPS even as revenues grow. In the upcoming earnings, however, the retailers would be better at managing the costs.

Our analysis finds that the fundamental strengths of Walmart remain intact. The company will continue to grow revenues, and EPS numbers will be better for the whole year. As the markets get a better understanding of the numbers, investors will take positions. This will have a positive effect on the stock.

Walmart starts recovery after crashing 19.49% last week

Source – TradingView

Walmart’s price is on the path to recovery. This week it has gained 3.6%. At the valuation of $123, the stock remains heavily discounted. The analysis maintains the price target at $150. The company will gain in two stages. The first is to the $135 support level. The second stage will be the rally from $135 to $150, by the next earnings date.


Walmart is a buy. The market is now deconstructing the wall of fear with a good understanding of how the stock is impacted by inflation. The target price is $150 by August.

The post Walmart stares at a wall of fear but fundamentals remain solid appeared first on Invezz.

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 All Rights Reserved.

To Top