Short Trade Idea
Enter your short position between $121.05 (Friday’s intra-day low) and 123.48 (Friday’s intra-day high).
Market Index Analysis
Walmart (WMT) is a member of the Dow Jones Industrial Average, the S&P 100 Index, and the S&P 500 Index.
All three indices retreated from record highs, and decreasing bullish trading volumes suggest more downside pressure ahead.
The Bull Bear Power Indicator of the S&P 500 Index is bearish with a descending trendline.
Market Sentiment Analysis
Equity futures point to a lower opening amid renewed tariff uncertainty. The US Supreme Court ruled against President Trump’s tariffs, placing the US government on the hook for a messy refund process for approximately $175 billion. President Trump lashed out immediately, imposed a 10% global tariff on all imports, and then raised it to 15%. Fourth-quarter GDP missed expectations badly, and the PCE inflation indicator remained sticky at 3.0%. Concerning earnings front, NVIDIA, Domino’s Pizza, Home Depot, and Warner Bros. will report this week.
Walmart Fundamental Analysis
Walmart is one of the largest companies by revenue globally, the largest private employer, and the largest publicly traded family-owned company. It has over 10,000 stores operating under more than 45 names in 24 countries.
So, why am I bearish on WMT after its earnings release?
Walmart reported revenues and earnings per share roughly in line with estimates, $190.66 billion and $0.74 versus $190.49 billion and $0.73, but its EPS guidance for fiscal 2027 disappointed alongside an expected slowdown in its sales growth, causing shares to sell off over the past two trading sessions. I am equally bearish on margin pressures, product recalls, and the costs of supply chain diversification. Valuations are excessive, and pharmacy legislation will pressure operating income moving forward.
Metric | Value | Verdict |
P/E Ratio | 45.05 | Bearish |
P/B Ratio | 9.00 | Bearish |
PEG Ratio | 3.37 | Bearish |
Current Ratio | 0.79 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
Walmart Fundamental Analysis Snapshot
The price-to-earnings (P/E) ratio of 45.05 makes WMT an expensive stock. By comparison, the P/E ratio for the S&P 500 is 29.70.
The average analyst price target for WMT is $134.44. This suggests limited upside potential with rising downside risks.
Walmart Technical Analysis
Today’s WMT Signal
The WMT D1 chart shows price action breaking down below its horizontal resistance zone.
It also shows price action between its ascending 0.0% and 38.2% Fibonacci Retracement Fan levels.
The Bull Bear Power Indicator turned bearish with a descending trendline.
The average bearish trading volumes are higher than the average bullish trading volumes.
WMT corrected as the S&P 500 Index advanced, a bearish confirmation.
My WMT Short Stock Trade
WMT Entry Level: Between $121.05 and $123.48
WMT Take Profit: Between $98.88 and $102.68
WMT Stop Loss: Between $131.70 and $134.69
Risk/Reward Ratio: 2.08
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