Walmart Inc (NASDAQ: WMT) has seen its stock reach new heights as the company anticipates its forthcoming inclusion into the Nasdaq-100 Index, effective prior to market opening on January 20. This inclusion also extends to the Nasdaq-100 Equal Weighted Index and the Nasdaq-100 Ex-Tech Sector Index, marking a significant milestone as Walmart replaces AstraZeneca PLC within the primary Nasdaq-100 benchmark. This shift underlines Walmart’s increasingly prominent stature in the U.S. equity landscape, suggesting a reassessment of its market positioning by index compilers.
Adding to the positive dynamics, Walmart recently announced a partnership with technology giant Google, aimed at transforming its online retail experience by incorporating Google’s Gemini artificial intelligence (AI) capabilities. This initiative intends to personalize customer engagement by providing tailored product recommendations for Walmart and Sam’s Club offerings and optimizing the delivery options. Notably, customers can expect benefits such as expedited local deliveries, potentially within three hours, enhancing convenience and competitive edge in the e-commerce sector.
The market context as of Tuesday morning reflects a nuanced picture. The Russell 2000 small-cap index edged up marginally by 0.16%, while the broader technology-heavy Nasdaq composite declined by 0.43%. Despite these headwinds in the broader markets, Walmart’s shares have displayed independent strength, surging higher and signaling investor confidence rooted in company-specific news rather than general market movements.
From a technical standpoint, Walmart’s shares currently exhibit robust short-term momentum indicators. The stock is trading approximately 4.9% above its 20-day simple moving average (SMA), and 12.5% above its 100-day SMA, signaling sustained upward momentum over both near-term and intermediate horizons. Over the past year, the stock has appreciated roughly 30.39%, positioning it favorably nearer to its 52-week highs rather than lows.
Additional momentum and market sentiment indicators provide mixed yet cautiously optimistic signals. The Relative Strength Index (RSI) sits at 66.83, suggesting a neutral zone where the stock is neither overextended nor oversold. Concurrently, the Moving Average Convergence Divergence (MACD) indicator is above its signal line, implying an underlying bullish momentum. This combination implies a tempered bullish outlook that warrants monitoring, especially by traders considering short-term positioning.
For investors focusing on fundamentals, Walmart is set to release its next quarterly earnings on February 19. Preliminary estimates project an earnings per share (EPS) of 72 cents, an increase from 66 cents in the previous year, reflecting anticipated earnings growth. Concurrently, revenue estimates are positioned at $189.18 billion, marking a rise from last year's $180.55 billion figure. These projections support an elevated valuation with a price-to-earnings (P/E) ratio estimated at 41.2 times current earnings, signaling a premium market valuation.
Analyst sentiment towards Walmart remains constructive with a consensus Buy rating and an average price target of $123.88. Recent analyst activity demonstrates confidence in Walmart's prospects, including:
- Barclays issuing an Overweight rating and raising the price target to $125.00
- Oppenheimer maintaining an Outperform rating and increasing the target to $125.00
- Mizuho assigning an Outperform rating with an elevated target price of $125.00
Examining valuation nuances through detailed rankings, Walmart scores highly on quality metrics, reflecting a robust balance sheet and stable financial foundation, as evidenced by a quality score of 93.35 out of 100. Momentum metrics are also favorable, with a score of 77.9, underscoring outperformance relative to the broader market indices. Contrastingly, valuation measures indicate some caution, with a lower score of 44.46, reflecting the stock’s elevated premium relative to comparable peers and raising considerations for potential valuation risk for new entrants.
Investment funds notably exposed to Walmart include iShares U.S. Consumer Discretionary ETF (NYSE: IYC) at 4.65% portfolio weight, Motley Fool Capital Efficiency 100 Index ETF (NYSE: TMFE) at 5.31%, and Simplify Next Intangible Core Index ETF (NASDAQ: NXTI) at 5.35%. Walmart’s concentrated weight in these exchange-traded funds implies that significant fund inflows or outflows could drive consequential automatic trading activity in Walmart’s shares, reinforcing its liquidity and price sensitivity within the market.
At the time of this report, Walmart’s share price advanced 1.63% to $119.89, reflecting robust investor demand amidst a mixed equity environment. This positive price action highlights market participants’ favorable reception to the company’s Nasdaq index inclusion and strategic technological partnerships.