Walmart (WMT) investors got caught asleep at the switch.
Shares logged their worst day in more than a year on Thursday, tanking 6.23% as the retailer surprised investors with a weak 2025 outlook. Shares were relatively unchanged in premarket trading on Friday.
The session was a new, unwelcome development in the Walmart story.
For much of 2025, Walmart investors only saw a stock price that went up and to the right as it consistently beat analyst profit estimates and raised guidance. The impressive 2024 run has taken shares to a rich valuation of 37 times estimated forward earnings, a stiff premium relative to the 22 times afforded the S&P 500.
But with tariff and consumer spending concerns swirling, Walmart’s profit outlook was lacking.
The company projected full-year earnings per share of $2.50 to $2.60. Analysts were modeling for $2.76 a share.
“We’re not immune to this [tariffs], but we typically will work with suppliers on this. We’ll shift supply where we need to. We can lean into our private brands. There’s a lot of tools that we have that to try to keep those prices low for customers,” Walmart CFO John David Rainey told Yahoo Finance.
Read more: What are tariffs, and how do they affect you?
The Street has largely defended Walmart’s stock in the aftermath of the sell-off, opting to reiterate bullish ratings and price targets. EPS estimates have started to trend lower, Yahoo Finance data shows, but still remain well above the company’s guidance.
“This company is consistent, and the consumer is consistent, so it’s [Walmart] well positioned for a beat-and-raise,” TD Cowen analyst Oliver Chen said on Yahoo Finance’s Morning Brief. “We certainly like it for the longer term.”
Here’s what Wall Street is whispering about after the 2025 outlook from Walmart.
“The ‘Walmart winning’ theme continues, though high market expectations and 2025 guidance that was weaker than consensus weighed on the stock. But nothing has changed. Walmart US continues to gain share in all income cohorts (though led by higher income consumers), driven not only by Walmart’s mindshare for value but also its convenience.
“Higher growth businesses such as marketplace, fulfillment and advertising are increasingly contributing to profits and will help drive margins in the future (and we believe Walmart can exceed historical peak EBIT margins). We believe 2025 guidance will prove conservative as was the case in 2024, and believe Walmart is positioned to outperform in the uncertain macroeconomic environment.”