Walmart Inc. (WMT): Goldman Sachs sees Walmart extending share gains through price investment, eCommerce momentum and newer digital businesses

Overview

This conference takeaway summarizes Walmart management's views on the US consumer, price investment, health and wellness, eCommerce, AI-enabled shopping and marketplace expansion. Goldman Sachs argues that value positioning and digital scale are supporting share gains and maintains a Buy rating.

Core views

Management characterized the US consumer as resilient but deliberate with spending and focused on value. Walmart said its combination of low prices and convenience is resonating and producing share gains across the business. Back-to-school performance was described as strong, supported by assortment, value and convenience, while back-to-college demand was particularly strong in dorm-related categories such as bed linens, microwaves and refrigerators. Walmart sells more than 50% of US back-to-school unit volume. Looking into the holiday period, management intends to reinforce everyday low cost and reinvest in price and customer experience, alongside planned fourth-quarter innovation and newness. A central driver of the value proposition is the redeployment of approximately $2.9 billion in 2Q tariff refunds into price investments, including rollbacks and offsets to transportation and fuel costs. Management said these investments have helped generate some of the strongest share gains in years and improve price gaps. It intends to work with suppliers to convert some rollbacks into everyday low prices in the second half. Like-for-like inflation ran at roughly 1.4% in the first half, with food near 1% and general merchandise near 2%; it moved below 1% entering 3Q as price investments took effect. Nevertheless, management expects second-half inflation to resemble the first half overall. Health and wellness faces a reported near-term revenue headwind from Maximum Fair Pricing regulation. The policy affected about 10 high-value drugs this year, eight of which either went generic or broadly extended pricing beyond Medicaid; 15 additional drugs are expected to be affected next year. Management nonetheless emphasized underlying strength in a business that represents about 10% of Walmart US and is primarily pharmaceutical. Script growth increased year on year in 2Q and profitability improved by double digits. The report also highlights customer-value evidence: health and wellness customers spend roughly three times as much as the average customer, rising to almost six times for customers using prescription delivery; same-day pharmacy deliveries more than doubled year on year and the repeat rate for these users improved tenfold. US eCommerce remains a major growth and profitability pillar. It grew 24% in 2Q, the 10th straight quarter above 20% growth, while delivery reach covers 96% of the US population within three hours and 60% within 30 minutes. About 70% of deliveries occur same day or faster, and 30-minute-or-less express deliveries doubled year on year. Management's reasoning is that greater delivery density lowers operating cost, while membership, marketplace and advertising add higher-margin alternative revenue; all three posted double-digit comparable growth in 2Q. The eCommerce business reached its sixth quarter of profitability, with 2Q its most profitable eCommerce quarter ever, and was profitable even excluding advertising. Walmart is also using agentic commerce to improve engagement and conversion. Its Sparky tool added visual shopping, where customers can submit a photo for shopping assistance; management said visual-shopping conversion is 57% higher than text-based shopping. Sparky weekly engagement rose more than 60% quarter on quarter, and customers who engage with it have a 40% higher average order value. Management also said partnerships with OpenAI and Google are directing relevant frontier-model users to Walmart with solid conversion, including new and returning customers. Marketplace sales in the US grew 52% in 2Q, with most growth in general merchandise. Walmart is expanding both first-party and third-party brand offerings, seeking to combine fast-moving in-store products with a broader online assortment. Examples include Nespresso, where nearly 40% of purchasers were new to buying coffee from Walmart, and roughly 100 in-demand beauty brands added during the prior 12 months. Sellers gain access to Walmart's more than 150 million weekly consumer engagements and Walmart Fulfillment Services, which handles about 50% of marketplace seller volume at an approximately 15% discount to competing market pricing. Goldman Sachs is Buy rated on WMT with a $132 12-month target price, based on downside, base and upside relative P/E multiples of 160%, 165% and 170%, respectively. The report lists downside risks from weaker economic activity, more intense pricing competition, global macro and foreign-exchange volatility, insufficient expense leverage to offset eCommerce and pricing investment, wage or transportation-cost pressure, and tariffs.

Analysis framework

The report synthesizes management commentary from the Global Consumer and Retail Conference, moving from consumer demand and price positioning to operating drivers in health, eCommerce, AI-enabled shopping and marketplace expansion. Goldman Sachs then frames its valuation through downside, base and upside relative P/E multiples.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Relative P/E multiple valuation

  Goldman Sachs sets its 12-month target using downside, base and upside relative P/E multiples of 160%, 165% and 170%.

• Industry AnalysisVolume-price decomposition

  Price investment, inflation and market-share analysis

  The report links tariff-refund-funded price investments, changes in like-for-like inflation and price gaps to Walmart's reported share gains.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Walmart Inc. (WMT.US)

  Primary covered company; price investment, eCommerce growth and marketplace expansion are presented as key operating supports.

  Strengths

  Broad share gains, 24% US eCommerce growth, delivery scale, profitable eCommerce, and fast marketplace growth.

  Weaknesses

  Health and wellness revenue faces Maximum Fair Pricing-related pressure.

  Comparison

  Walmart Fulfillment Services is offered to sellers at an approximately 15% discount to competing market pricing.

  Risks

  Economic slowdown, pricing competition, macro/FX volatility, insufficient expense leverage, wage or transportation costs, and tariffs.

Key data

• Tariff refunds~$2.9 billionReceived in 2Q and prioritized for price investments, including rollbacks and cost offsets.
• Like-for-like inflation~1.4% in 1HFood was near 1% and general merchandise near 2%; inflation moved below 1% entering 3Q.
• US eCommerce growth24% in 2QThe 10th consecutive quarter of growth above 20%.
• Marketplace sales growth+52% in 2QThe majority of growth was in general merchandise.
• Sparky visual-shopping conversion uplift+57%Versus text-based shopping.
• WMT 12-month target price$132Based on 160%/165%/170% downside/base/upside relative P/E multiples.
• WMT price and implied upside$109.08 and 21.0%Price as of 14 September 2026 close.

Impact & implications

The report presents price investment and convenience as reinforcing Walmart's share position while eCommerce scale, marketplace, membership and advertising improve the economics of digital growth. Regulatory pharmacy pricing is a near-term sales headwind, but management views customer engagement and profitability trends in health and wellness as supportive.

Risks

• A slowdown in economic activity could pressure Walmart's business.
• A more intense pricing environment could weigh on results.
• Global macroeconomic and foreign-exchange volatility are downside risks.
• Walmart may be unable to generate enough expense leverage to offset eCommerce and pricing investments.
• Wage, transportation-cost and tariff pressures could adversely affect performance.

What to watch

• The durability of share gains from price investments and the conversion of rollbacks into everyday low prices.
• Holiday execution, including fourth-quarter innovation and new product introductions.
• The effect of Maximum Fair Pricing on health and wellness sales as 15 additional drugs are affected next year.
• Whether eCommerce growth, delivery density and alternative revenue businesses continue to support profitability.
• Adoption, conversion and order-value trends for Sparky and other agentic-commerce channels.