"The bears got their way": JPMorgan recommended buying Walmart stock after its plunge

JPMorgan saw a buying opportunity amid the plunge in shares of Walmart, the world’s largest hypermarket chain. The day before, following quarterly U.S. sales figures that disappointed the market, the stock suffered its biggest one-day drop in four years, according to CNBC. “The bears have gotten their price [for Walmart shares]; [now] the fundamentals should improve,” JPMorgan believes.

Despite Walmart’s recent results and stock performance, JPMorgan maintained its “buy” rating on the hypermarket chain’s shares but lowered its price target from $137 to $125 per share. Even so, the updated target price implies nearly 20% upside potential relative to Thursday’s closing price.

“We’re buying [Walmart] shares—we believe the sell-off is over, the ‘bears’ have reached their target price [for Walmart shares], and the company’s performance metrics should improve as growth in alternative revenue streams accelerates,” CNBC quotes JPMorgan analyst Christopher Horvers as saying. In his view, the arguments in favor of a further decline in Walmart’s stock appear overly pessimistic: “Looking ahead, [maintaining] short positions [in the hypermarket chain’s stock] seems overly greedy to us,” Horvers noted.

The “bearish” scenario, in his view, is based on a relative assessment compared to discount stores and traditional supermarkets, according to the Investing analyst. In addition, bears believe that in 2027, Walmart will have to compare its results to a period when the company received refunds on duties paid, which will have a negative impact on its financial statements, and — do not expect a lagging elasticity curve for price-related investments (that is, a delayed market reaction to the company’s deliberate price cuts to sustain demand), says Horvers. Geopolitical factors are also “weighing on Walmart’s stock”: “But this is a problem for low-income consumers,” the analyst believes.

“Ultimately, we believe that we should expect major institutional investors (on the buy side) to revise their forecasts [for Walmart] upward, rather than downward,” Horvers wrote, emphasizing that “the company’s long-term growth story”—driven by the development of its marketplace, “the expansion of alternative revenue streams,” and the benefits of AI-driven automation—“has, in fact, only been reaffirmed.”

In its quarterly report published on August 20, the hypermarket chain reported a slowdown in comparable sales in the U.S.—growth stood at 2.6%, the retailer’s lowest figure in more than six years.

The main reason for the weak sales was government regulation of drug prices, which led to a decline in the pharmacy segment’s performance. The results were also affected by consumer caution, as shoppers began to spend more sparingly: in the quarter ending July 31, the average purchase amount was lower than a year earlier, while the frequency of store visits remained unchanged.

At the same time, Walmart raised its full-year guidance, noting that it now expects net sales to grow by 4–5% compared with the previous range of 3.5–4.5%, and adjusted earnings of $2.80–$2.87 per share instead of $2.75–$2.85. Walmart’s earnings are being driven by the expansion of its online offerings, the attraction of higher-income shoppers, as well as its advertising business and third-party marketplace.

After plunging 9% on Thursday—Walmart’s biggest one-day drop since May 17, 2022—the company’s stock fell another 0.7% on August 21.

Since the beginning of 2026, Walmart's stock has fallen more than 7%. However, analysts' average price target for the stock is $130.54—26% higher than Thursday's closing price.

According to MarketWatch, of the 45 analysts covering Walmart, 39 recommend buying the stock, while five are neutral. One other analyst recommends selling the hypermarket chain's stock.

This article was AI-translated and verified by a human editor