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Opinions John Stephenson
Walmart IncWMTTOP PICKMar 07, 2017
John StephensonStock price when the opinion was issued
As of Oct 16, 2026. Market Open.
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WMT and COST are the dominant discount retailers in the US. They became priced for perfection, with multiples of 40-50x PE for a large, mature company. Might be a great company, but that multiple's for a younger company, growing at very high rates because it can get a lot bigger. Both are in the process of compressing to a 20x PE multiple.
Either earnings are better than expected and stock trends sideways. Or earnings are worse, and multiple goes down. Either way, not much upside.
It reports Thursday. The beat every quarter, and will benefit from tariff refunds this and next quarter.
Joe Terranova
It's at the 200-day moving average, which looks like support. WMT is still capturing market share. EPS growth was strong, 13% in 2025, though moderating now. The valuation got rich, but is moderating now 46x before and now below 40x.
Joe TerranovaBoth great companies, but both very expensive. COST is over 50x PE, and WMT's in the 40s. Fairly low-margin model. Reliant on the consumer, and everyone's affected when that consumer is struggling.
WMT reported today. Earnings were OK, but projections on future quarters were tough. High fuel prices were highlighted.
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Premium contentIn the last quarter, the company reported 0.62 USD per share, beating the 0.60 USD estimate by 3.18%. Revenue for the same period reached 179.50 B USD, despite the estimate of 177.44 B USD. For the next quarter, analysts expect 0.73 USD in earnings per share and 190.49 B USD in revenue. Social media mentions are up 150% in the past 24h.
Successful transition to e-commerce is why stock's been on fire. Topline growth is only 4-5%, and his team debates this company all the time. PE is 46x earnings for 2026, extremely expensive. Seen as a safe place to park $$ as they continue to execute.
See his Top Picks.
The PE is a high 50x, but Costco is also high. It benefits from inflows into the XLP staples sector, of which 21% is Walmart and Costco. It reports Thursday. Don't reach for it here.
Joe Terranova
*Short*. A good company, the largest retailer in the world, but that is one of the problems. How do you grow, especially when growth is 56% of your business. You have everything from organic producers to super discounters fighting you. It is hard for them to move the needle and increase their margins. They’ve been trying to ratchet down street expectations by 15%-20% over a multiyear period. Their consumer is predominantly lower and middle class consumers, who are more impacted by gas prices and probably not going to benefit from Trump’s rhetoric of “America First”. Dividend yield of 2.92%. (Analysts’ price target is $73.00.)