What Are Walmart Investors Betting On

Walmart (WMT) stock trades at 42.8 times its reported net income over the last twelve months. That is a steep multiple for a retailer that grew sales by 6.2% during the same period. A buyer is paying for more than a single year of profit, however, and the valuation looks different against what Walmart is expected to earn over the next two fiscal years. So what growth in sales and profit does the consensus forecast expect, and how does that price look against it?

Walmart Is Forecast To Grow Profit Faster Than Sales

The consensus forecast projects Walmart's net income to rise 11.7% in fiscal 2028, alongside sales growth of 4.4%. Profit outpaces sales at that rate only when a company manages to keep more of every dollar it generates.

Consensus estimates put the net margin at 3.1% in fiscal 2027 and 3.3% in fiscal 2028. Walmart reported a 3.1% net margin in fiscal 2026, so the forecast assumes a flat margin in fiscal 2027 and a wider one in fiscal 2028.

Under the consensus forecast, the share price trades at 40.7 times Walmart's fiscal 2027 earnings, compared with the 42.8 multiple over the last twelve months. That valuation drops to 36.4 times on fiscal 2028 earnings, though the forecast for that year is less certain, with EPS estimates ranging from $3.10 to $3.56.

Has Walmart Been Growing Profit Faster Than Sales?

Over five years, it has. Walmart more than doubled its net income to $22.1 billion in the twelve months to July 2026, from $10.1 billion five years earlier. Sales climbed by far less, rising to $736 billion from $566 billion.

The most recent year broke that pattern, as reported net income grew more slowly than sales. Therefore, the profit growth in the consensus forecast has to come largely from a wider margin, with projected sales growth for fiscal 2028 falling below what Walmart just delivered.

Management is guiding toward a wider margin as well. On August 20, the company raised its fiscal 2027 guidance for adjusted operating income growth to 7% to 8.5%, against net sales growth of 4% to 5%, both in constant currency.

Management said almost half of the profit growth came from membership, advertising and marketplace, a trend it expects to continue. Global advertising increased 38% in fiscal Q2 2027, led by Walmart Connect in the U.S., while membership fee revenue reached an all-time high.

Where Could Walmart Fall Short Of The Forecast?

On August 20, executives raised the adjusted EPS guidance for the year to $2.80 to $2.87. The consensus forecast of $2.89 a share sits slightly above that range, if both are on the same adjusted basis. If Walmart lands inside its guided range, the forecast would come down.

The consensus forecast for fiscal 2028 profit growth also builds on a base year that included tariff refunds. Walmart said it received nearly $2.9 billion of them, which lifted its second-quarter operating profit, and management is redirecting much of that money back into lower prices. Management also said that lapping the 19% growth in adjusted EPS from fiscal Q2 2027 will be a challenge in fiscal 2028. If Walmart's profit growth slows in fiscal 2028, that year's forecast would come down as well.

If Walmart earns the profit projected in the consensus forecast, the forward multiples provide a fair picture of the price you pay. The weaker part of the forecast is the wider margin, not the sales, and that margin must arrive after the refunds go into lower prices. If it does not, you hold a riskier stock, priced for profit Walmart has not yet earned. Measured against its own guidance, Walmart's adjusted EPS is the number to watch in its next report, expected on or around November 19.

How To Act On WMT?

Not necessarily on Walmart alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Walmart is one. Over the five years to October 2026, its stock rose 162%, ahead of 10 of the 11 other companies in Consumer Staples Merchandise Retail, where the typical company rose 64%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

Spot an error or want more like this? Tell us in 10 seconds.