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Walmart's Upswing: Analysts Bullish Ahead of Earnings Report

Walmart (NYSE: WMT) prepares for a stock boost as analysts express bullish sentiment ahead of the FQ1 2026 earnings, forecasting a 10-20% rise. Despite a cautious tone, the report highlights strong EPS and growth in free cash flow, driving investor optimism.

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AI Rating:   7

Walmart’s Performance Highlights - As Walmart gears up for its FQ1 2026 earnings report, indications show a positive trend for stock prices. Analysts express optimism due to the company's solid underlying strengths and favorable market position. With expectations of a 10-20% price increase from pre-release levels, Walmart's stock performance is suggesting upward momentum.

The report highlights several critical financial metrics that are influencing market sentiment. First, the Earnings Per Share (EPS) of $0.61 is a positive signal, showing a slight year-over-year increase that outperformed consensus expectations by a notable 500 basis points. Such earnings strength tends to instill confidence among investors, pushing stock prices higher.

Furthermore, revenue growth, indicated at 3.5% for the year, although slightly cautious, reflects a reliable trajectory—especially with a 2.5% growth rate noted in the recent quarter that was attributed largely to digital channels and U.S. comparable sales. The firm showed resilience, particularly in its core operations such as U.S. sales, which grew by 3.2% and Sam’s Club reporting a 2.9% rise in sales.

Cash Flow Strength - Another critical aspect of this report is the substantial growth in Free Cash Flow (FCF). The company managed to turn around a negative FCF from the previous year to a positive $0.4 billion this quarter, representing a significant milestone. Operating cash flow showed a robust increase of 25%, suggesting Walmart’s operational efficiency and financial health are on the rise, which are important indicators for any investor.

Lastly, Walmart’s strategy regarding capital return remains strong, with secure dividends that represent less than 40% of the earnings outlook, further supporting investor sentiment.

Despite the concerns over guidance, which may be perceived as a cautious outlook, the overall performance metrics such as EPS growth, improving cash flows, and solid revenue growth paint a generally positive picture for Walmart in the short term. Investors may want to keep an eye on key support and resistance levels moving forward.

Stocks:  WMT