Walmart's Q3 Outlook: Analyst Insights on Bull and Bear Scenarios
Walmart, the retail giant, is poised to unveil its third-quarter financial results this Thursday, offering critical insights into prevailing consumer spending habits and the impact of tariffs on its operations. Analysts are eagerly anticipating the report, with revenue projections around $177.41 billion, a notable increase from the previous year's $169.59 billion. Furthermore, earnings per share are expected to climb to 60 cents, up from 58 cents in the prior year's third quarter. While Walmart has generally surpassed revenue estimates in nine of the last ten quarters, it did fall short in the most recent second quarter. The company's consistent performance in beating earnings per share estimates, doing so in eight of the last ten quarters, underscores its financial resilience.
Amidst the impending earnings release, a notable analyst from Bank of America, Robert F. Ohmes, has presented a detailed bull and bear case for Walmart's stock. The bull argument is bolstered by the retailer's ability to capture market share across diverse product categories and income brackets, its expanding footprint in AI-driven commerce, anticipated gross margin improvements through ancillary businesses, and its effective navigation of tariff-related challenges. Conversely, the bear case outlines concerns regarding challenging comparative figures from previous periods, a potentially slower-than-expected adoption rate for AI commerce solutions among consumers, headwinds in the grocery sector, and the stock's elevated valuation, currently trading at approximately 35 times earnings, a two-decade high. Ohmes, while reaffirming a Buy rating and a $125 price target, emphasized Walmart's strong position in e-commerce, driven by its value and convenience propositions, yet acknowledged that the high valuation and tough comparables might temper upward stock momentum relative to its retail counterparts.
Key aspects to monitor in Walmart's upcoming report include the implications of the recent CEO transition, with John R. Furner succeeding Douglas McMillon in January 2026. The performance of competitor Target, which is scheduled to release its results earlier in the week, could also offer a precursor to Walmart's trends, particularly concerning market share dynamics. Recent data from Placer.ai indicated Walmart's superior year-over-year traffic growth compared to Target in the third quarter. Investors will also scrutinize the company's forward guidance, especially any adjustments to the previously raised annual outlook for earnings and revenue, and the reported impact of tariffs, which former CEO McMillon had cautioned could escalate in the latter half of the year. Walmart's stock closed recently at $101.39, reflecting a 1.52% dip, but has seen a 12.7% increase year-to-date in 2025.
Walmart's consistent ability to adapt and innovate in a dynamic retail landscape, coupled with its strategic focus on e-commerce and customer value, positions it for continued success. The company's resilience in navigating economic challenges and its commitment to leadership evolution demonstrate a forward-looking approach that fosters growth and sustained market presence.