Walmart Stock Surges After a Solid Q3-Stronger Growth Ahead

Walmart’s (NYSE: WMT) Q3 earnings results and guidance prove that it is on track, taking share from its major competitors like Target (NYSE: TGT), and can sustain its share price uptrend. Among the critical details are its industry-leading growth and outperformance relative to Target’s more tepid results.

Target's decline is Walmart’s gain, as it is taking market share and is likely to sustain its leadership position for the long term. Walmart is likely to continue growing, driving cash flow, and returning capital to investors—three key reasons investors are considering it as a long-term hold. 

Walmart Takes Marketshare in Q3, Guidance Indicates Momentum Is Building

Walmart had a solid quarter with its revenue up 5.8% year-over year (YOY) and outperforming analyst consensus by nearly 250 basis points. All operating segments contributed to growth, but eCommerce was the strongest driver, growing by 27%. This growth came across all digital sub-segments, each delivering more than 20% increases.

In the United States, same-store sales grew by a better-than-forecasted 4.5%, with transactions and ticket averages driving the strength. International operations grew by a stronger 10.8% and Sam's Club by just over 3%. The critical detail in Sam’s data is that membership growth leads revenue growth, suggesting revenue growth will accelerate in the upcoming quarters. 

Margin news is mixed. The company recorded one-offs and non-cash impairments, resulting in a decline in GAAP income. However, the adjusted figure reveals operating income grew at an accelerated 8% pace, with both cash flow and free cash flow robustly higher YOY. The free cash flow, crucial to the dividend and capital return outlook, increased 42% YOY to $8.8 billion, resulting in a 64% dividend-to-free-cash payout ratio. 

Guidance is a factor in the share price outlook. The company raised its guidance for the 2nd time this year, expecting revenue and earnings to grow by approximately 4% apiece, with earnings outpacing revenue by a slim margin. The guidance aligns with analyst expectations, indicating business momentum that may lead to outperformance in the fourth quarter. 

Broader economic signals support this bullish outlook. While the federal shutdown delayed the official October jobs report, early private‑sector data showed better‑than‑expected job gains, stable unemployment, and rising wages—conditions that typically support strong holiday spending.

Analysts Like What They See

Within the first few hours following the earnings release, several analysts issued positive commentary, citing the improved guidance and momentum that is likely to carry into Q4. Chatter appears to align with the bullish trends, including steady coverage, a consensus Buy rating, and an upward trend in price targets.

As of mid-November, the consensus suggests a 10% upside, which would be sufficient to reach a new all-time high. Some of the most optimistic price targets are close to $129, which would be worth a solid 20% upside, including the dividend yield—a target that could be reached by early 2026. 

Walmart’s post-release advance aligns with its bullish market sentiment. The stock gained approximately 5% within minutes of the open, revealing support at a critical level. That level aligns with early Q4 support and the long-term, 150-day exponential moving average, which is unlikely to be broken at this time. 

The likely outcome is that the WMT share price will continue to drift higher over the coming weeks, potentially hitting an all-time high before year-end. Potential catalysts include the Black Friday and Cyber Monday selling events, which are likely to drive robust results. 

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The article "Walmart Stock Surges After a Solid Q3—Stronger Growth Ahead" first appeared on MarketBeat.