Walmart earnings preview: analyst says WMT's premium multiple is justified

Bentonville-headquartered Walmart Inc WMT is in focus as the retail titan prepares to release its first-quarter (Q1) earnings on May 14^th – before the opening bell.

Consensus is for WMT to earn $0.65 a share (adjusted) on about $172.5 billion in revenue, which represents a meaningful top- and bottom-line growth from $0.61 per share and $165.5 billion last year.

Heading into the quarterly print, Walmart stock is up some 15% versus the start of this year (2026).

Analyst remains bullish on Walmart stock ahead of Q1 print

Morgan Stanley analysts are recommending clients to load up on WMT shares ahead of the firm’s Q3 earnings.

Their $140 price target signals potential upside of another 8% from current levels.

According to the investment firm, Walmart’s current valuation – nearly 45x forward earnings – is justified by its structural evolution.

Its analysts highlight a “flywheel” effect where e-commerce scale feeds into high-margin segments like Walmart Connect, the retailer’s advertising arm, which saw 41% growth in the previous quarter.

By leveraging its 2.1 million employees and massive physical footprint as fulfillment hubs, WMT is no longer just a defensive grocery play; it’s a tech-driven disruptor.

Morgan Stanley also said that Walmart’s Q1 comparable sales could pop as much as 4.5% - much more than a 3.9% growth that experts have penciled in. 

Where options data suggests WMT shares are headed next

Options traders seem to agree with Morgan Stanley as well, pricing in a continued surge in Walmart shares after Q1 earnings.

According to Barchart, the “put-to-call ratio” on contracts expiring May 15 sits at 0.46 currently – indicating a bullish skew – with the upper price suggesting WMT could be trading at nearly $133 by the end of this week.

Even from a technical perspective, Walmart looks poised for further gains ahead.

It has rallied past its major moving averages (MAs), with an RSI in the early 50s indicating more room to the upside before the stock hits “overbought” territory.

A 0.76% dividend yield makes WMT even more attractive as a long-term holding in 2026.

How to play Walmart Inc ahead of its first-quarter earnings

A critical component of WMT stock’s premium valuation is its aggressive integration of artificial intelligence across its global infrastructure.

Unlike traditional retailers, Walmart Inc is utilizing agentic AI and predictive analytics to optimize supply chains and personalize the shopping experience.

This Physical AI strategy has transformed the firm into a high-tech logistics powerhouse, allowing it to compete directly with Amazon on delivery speeds while maintaining superior grocery margins.

By automating its distribution centers and using AI to manage inventory in real-time, Walmart is effectively exporting its US tech playbook to international markets like Mexico and China.

This digital transformation is the primary reason Wall Street is willing to pay a tech-like premium for the 63-year-old retail institution.