WMT Stock Up 6.5% on Solid Q3 & Upbeat View: Time to Buy or Hold?

Walmart Inc. WMT shares jumped 6.5% yesterday, as investors’ sentiment got a spark from the company’s robust third-quarter results and raised fiscal 2026 outlook. The quarter showed strength across all key areas — healthier revenue growth, faster e-commerce adoption, and continued expansion across membership and advertising.

With e-commerce again leading the performance and management showing increased confidence heading into the holiday period, Walmart enters the final quarter with clear operational tailwinds and steady investor support.

Following yesterday’s rally, the omnichannel retailer’s stock price has appreciated 18.6% year to date, outperforming the industry’s 11.5% growth, the broader Zacks Retail – Wholesale sector’s 2.3% increase as well as the S&P 500’s gain of 14.2%. The Bentonville, AR-based company has also outdone peers such as Kroger KR, Costco COST and Target TGT. While Kroger gained 7.8%, Costco and Target declined 2.5% and 38.1%, respectively, year to date.

WMT Price Performance vs. Industry, S&P 500 & Sector

Breaking Down WMT's Q3 Performance

In the third quarter of fiscal 2026, WMT’s total revenues rose 5.8% to $179.5 billion (up 6% in constant currency), supported by solid momentum across segments. Global e-commerce sales surged 27%, driven by marketplace strength and continued gains in store-fulfilled pickup and delivery. Membership income increased 16.7%, and Walmart’s global advertising business accelerated 53%.

Adjusted earnings per share (EPS) grew 6.9% to 62 cents per share, while the consolidated gross margin expanded modestly, aided by Walmart U.S. Adjusted operating income reached $7.2 billion, reflecting 8% growth in constant currency.

Walmart U.S. posted 5.1% net sales growth and 4.5% comp sales growth (excluding fuel), with e-commerce up 28%. International net sales increased 10.8% (or 11.4% cc) with strong contributions from Flipkart, China and Walmex. Sam’s Club delivered 4.4% net sales growth (excluding fuel) and 22% e-commerce growth, alongside 7.1% membership income growth.

Walmart’s cash-generating engine remained a major strength. Year to date, the company produced $27.5 billion in operating cash flow, driven by improved profitability and lower cash taxes. Even with elevated capital expenditures related to store remodels, supply-chain automation and digital investments, Walmart generated $8.8 billion in free cash flow. This allowed the retailer to return meaningful capital to shareholders, including $7 billion in share repurchases.

Walmart expects 4.8-5.1% net sales growth (at cc) and adjusted EPS of $2.58-$2.63 for fiscal 2026, signaling management’s confidence in the strength of its omnichannel model, digital scale and membership network heading into year-end.

Is WMT’s Valuation Justified?

WMT currently trades at a forward 12-month P/E of 37.44, above its one-year median of 35.68. The valuation also sits noticeably higher than the industry average of 32.17 and the broader Zacks Retail–Wholesale sector’s 23.60. This premium indicates that investors have already priced in much of Walmart’s recent strength and raised outlook, leaving less cushion if growth slows or costs rise.

How to Play WMT Stock?

Walmart’s third-quarter results reflect the strength of its omnichannel ecosystem, with solid e-commerce momentum, membership gains and healthy cash generation supporting its raised fiscal 2026 view. However, the stock’s valuation currently sits at a premium to its historical levels and sector benchmarks, limiting further upside potential. While Walmart remains a fundamentally strong operator, the stock’s elevated valuation suggests it may be prudent to wait for a more favorable entry point. WMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research