Goldman Sachs maintains a BUY rating on Walmart with a 12-month target price of $154

Overview

This is a Goldman Sachs report summarizing key takeaways from Walmart Inc. (WMT.US)’s IR call. Goldman Sachs maintains a BUY rating and assigns a 12-month target price of $154.00, implying 34.0% upside from the current price of $114.95. The core view of the report is that Walmart is positioned to continue gaining market share through its value and convenience proposition, while delivering solid earnings growth in 2026, with further room for margin structure improvement.

Core views

Goldman Sachs believes consumer trends have not changed dramatically versus 1Q: low-income consumers remain volatile but that volatility has narrowed, middle-income consumers are stable, and high-income consumers remain resilient. In 2Q, sequential pressures include the non-repeat of tax refund benefits, weaker benefits from tariff-related price increases in general merchandise, and a softer consumer environment, though unit growth and market share gains may partly offset these headwinds. Walmart is using tariff refunds for price investment, reflecting a more promotional industry environment and the company’s continued effort to reinforce its value positioning. The health and wellness business remains supported by volume growth, and pharmacy-related regulatory changes may pressure sales but support margins.

Analysis framework

The report is based on a call with Walmart’s investor relations team and incorporates management’s explanations regarding consumer segmentation, price investment, rollback mechanisms, tariff refunds, pharmacy regulatory changes, and changes in GLP-1 drug coverage, in order to assess the risk-reward for Walmart’s future revenue, margins, and valuation. The valuation section applies Goldman Sachs’ risk-reward framework, using relative P/E multiple scenarios to derive the target price.

Methodology notes

• Valuation methodsGS risk-reward framework

  Relative P/E multiple scenario valuation

  Goldman Sachs’ 12-month target price of $154 is based on its risk-reward framework, using relative P/E multiples of 175%/180%/185% under bear, base, and bull scenarios.

• factor_profileGS Factor Profile

  Percentile comparison across growth, financial returns, valuation multiples, and composite factors

  The Goldman Sachs Factor Profile provides investment context by comparing a company’s key attributes with Goldman Sachs’ coverage universe and industry peers across growth, financial returns, valuation multiples, and composite metrics.

• ma_rankM&A Rank

  Probability score for being a potential M&A target

  Goldman Sachs M&A Rank scores from 1 to 3, where 1 represents high probability, 2 medium probability, and 3 low probability; Walmart’s M&A Rank is 3, meaning M&A factors are not material to the target price.

Asset mapping & comparison

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

• WMT.US

  Covered stock

  Strengths

  Strong value and convenience proposition, continued market share gains, strong ability to invest in price, and health and wellness business driving traffic and cross-category spending.

  Weaknesses

  Low-income consumers remain under pressure, and 2Q lacks 1Q tax refund support and some general merchandise pricing tailwinds.

  Comparison

  The report compares WMT within the Americas Retail Specialty Hardlines, Supermarkets and Discount Stores coverage universe, with the rating positioned relative to that same universe.

  Risks

  Economic slowdown, intensifying price competition, macro and FX volatility, wage and transportation cost pressures, and tariff impacts.

• Sam’s Club

  Walmart subsidiary business and price investment target

  Strengths

  Benefits alongside Walmart from price investment and rollback mechanisms, which may drive household customer acquisition and subsequent volume improvement.

  Weaknesses

  A more promotional environment may pressure short-term pricing and profit performance.

  Comparison

  Together with the Walmart core brand, it reflects the company’s strategy of reinforcing its value positioning.

  Risks

  There is uncertainty around the timing with which price investment translates into volume improvement.

Key data

• RatingBUYThe rating has been BUY since Jul 11, 2019.
• 12-month target price$154.00Based on Goldman Sachs’ risk-reward framework.
• Current price$114.95Price disclosed on the report cover page.
• Implied upside34.0%Calculated from the target price relative to the current price and presented in the report.
• Market capitalization$914.2bnDisclosed in Key Data.
• Enterprise value$968.3bnDisclosed in Key Data.
• 3-month average daily trading value$2.7bn3m ADTV.
• FY1/27E revenue$754.5017bnThe original table reads 754.501.7; the disclosed text is preserved despite a possible OCR formatting anomaly.
• FY1/27E EBITDA$49.6449bnGS Forecast.
• FY1/27E EPS$2.97GS Forecast.
• Eligible tariff refund amount约$3bnThe company indicated it may receive approximately $3bn in tariff refunds, though the timing of receipt is not linear.
• M&A Rank3Low-probability M&A target score, typically not included in the target price.

Impact & implications

The implications for WMT are broadly positive: in the near term, 2Q may face pressure from fading tax refund benefits, weaker general merchandise pricing tailwinds, and a softer consumer environment, but Walmart’s unit growth, market share gains, and price investments may provide a buffer. Tariff refunds provide a new source of funding for price investment, and if rollbacks drive subsequent volume improvement, stronger sales performance may emerge in late July and August. Traffic and consumer linkage from the health and wellness business may also continue supporting food and fresh-related categories.

Risks

• Slower economic activity.
• A more competitive pricing environment.
• Global macro and foreign exchange volatility.
• Inability to offset e-commerce and price investment through operating leverage.
• Wage or transportation cost pressures.
• Tariff impacts.
• Low-income consumer sentiment has not yet improved, and spending pressure may still recur.

What to watch

• Whether 2Q unit growth and market share gains can offset fading tax refund benefits and slower consumption.
• The actual timing of receipt for the approximately $3bn in tariff refunds and the extent of their support for price investment.
• The impact of recent rollbacks on sales in late July and August.
• Changes in the share of temporary rollbacks turning into permanent price cuts and their effect on gross margin.
• The three-year, three-phase impact of the MFP pharmacy policy, and its net effect on sales and margins.
• Whether Walmart pharmacy participation and food business linkage improve after Medicare covers certain GLP-1 drugs.