Walmart (WMT) just posted solid fourth-quarter results, yet its stock took a 6% hit. Investors reacted to the company’s cautious 2025 outlook, but Jefferies sees this as an overreaction. The firm is urging investors to buy the dip, arguing that Walmart’s guidance is conservative but easy to beat, just like in 2024, when the company kept topping forecasts.
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WMT Delivers Strong Results but Guides Cautiously
Walmart reported $180.55 billion in Q4 revenues, up 4.1% year-over-year. U.S. same-store sales climbed 4.6%, and global e-commerce sales surged 16%. Also, adjusted EPS came in at $0.66, up 10% from the same period last year and broadly in line with estimates.
Even with these strong numbers, Walmart’s stock slid because the company’s guidance for the current year missed expectations. Walmart forecast annual net sales to rise in the range of 3% to 4% in the current Fiscal year, compared with analysts’ expectations of 4% growth.
Jefferies wasn’t surprised by the cautious outlook but believes it sets the stage for a strong year of “beats & raises.”
Jefferies Thinks the Stock Will Rebound
Jefferies reiterated its Buy rating on the stock, highlighting Walmart’s continued market share gains, particularly among higher-income shoppers. The firm expects Walmart’s stock to bounce back soon, noting that the stock’s year-to-date gain shows that investors still believe in its long-term strength despite the recent drop.
Jefferies highlighted that the company’s margins remained stable due to smart inventory management, fewer markdowns, and solid pricing power. While operating income missed estimates, the firm pointed out that Walmart still managed to beat expectations on adjusted EPS.
Overall, Jefferies believes Walmart is well-positioned for strong earnings growth in 2025, making this pullback a buying opportunity.
Is WMT a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on WMT stock based on 24 Buys and one Sell assigned in the past three months, as indicated by the graphic below. After a 70% rally in its share price over the past year, the average WMT price target of $112.25 per share implies 15.47% upside potential.
