Walmart just had its worst day in 4 years. JPMorgan says buy it now
Walmart just had its worst day in 4 years. JPMorgan says buy it now
On Monday, August 21, 2026, Walmart (WMT) saw its shares plunge 7.2% to $138.45, marking the retailer’s steepest one‑day decline since August 2022. The slide came after the company reported fourth‑quarter earnings that missed analysts’ expectations on both revenue and profit margins.
Key earnings highlights
- Revenue: $162.3 billion, down 1.4% YoY, versus the consensus estimate of $164.8 billion.
- Adjusted EPS: $1.02, missing the forecast of $1.09.
- Operating margin slipped to 3.6% from 4.1% a year earlier.
- Same‑store sales fell 2.1% in the U.S., the first decline since 2020.
The company cited several headwinds: higher labor costs, lingering supply‑chain disruptions in its grocery segment, and intensified competition from e‑commerce rivals that have accelerated price‑matching and same‑day delivery services.
Despite the disappointing numbers, JPMorgan’s senior equity analyst John McAllister urged investors to view the dip as a “buy‑the‑dip” opportunity.
JPMorgan’s rationale
- Strong cash flow: Walmart generated $12.4 billion of free cash flow in Q4, supporting its $2.5 billion share‑repurchase program.
- Dividend resilience: The retailer continues its 61‑year streak of dividend increases, now yielding 1.8%.
- Strategic investments: Ongoing rollout of AI‑driven inventory management and expansion of the Walmart+ subscription service are expected to lift margins over the next 12‑18 months.
- Valuation upside: At the current price, Walmart trades at a forward P/E of 9.8x, well below the 12.5x average for large‑cap retailers.
McAllister added, “The market is over‑reacting to short‑term pressure. Walmart’s balance sheet, scale, and omnichannel capabilities remain unrivaled. The dip creates a margin of safety for long‑term investors.”
Analysts at other firms were more cautious. Morgan Stanley highlighted the risk of continued margin compression, while Barclays warned that the “price‑war environment could erode profitability if Walmart cannot accelerate its digital transformation.”
Investors will watch Walmart’s upcoming earnings call for details on how the retailer plans to mitigate cost pressures and whether the AI initiatives will translate into measurable sales growth. For now, JPMorgan’s bullish stance suggests that the retail giant’s stock could rebound sharply if it can deliver on its strategic roadmap.