Walmart (WMT) shares are inching higher ahead of the retail behemoth’s fiscal Q2 earnings set to be released before the market opens on Aug. 20. The consensus is for WMT to post $0.73 in earnings per share (EPS) for its second financial quarter, which would represent a 7.35% increase on a year-over-year basis.
Walmart stock has been a disappointing investment in 2026, currently up less than 2% versus the start of this year.
Options Data Suggests Walmart Stock Will Sink on Q2 Earnings
Importantly, the options market does not believe a meaningful near-term recovery is likely on the back of Q2 earnings later this week.
According to Barchart, the put-to-call ratio on contracts expiring Aug. 21 sits at 1.56x currently, indicating a strong bearish skew.
And the lower price on those options contracts is set at $110.54, suggesting WMT shares may sink as much as 4.28% immediately after its earnings event.
Investors are recommended to exercise caution in playing Walmart also because it’s trading at nearly 40x forward earnings at writing, which makes it expensive even when compared with the best-of-breed artificial intelligence (AI) stocks like Nvidia (NVDA).
Bernstein Recommends Buying the Pullback in WMT Shares
On the flip side, Bernstein’s senior analyst Zhihan Ma recommends that investors load up on WMT if it sinks after reporting earnings on Thursday.
In her latest research note, Ma admitted that Walmart is “experiencing a comp slowdown due to the lapping of tariff-driven increases in the gen merch category.”
Beyond this near-term noise, however, Walmart shares remain a strong fundamental position, she told clients. Bernstein’s $142 price target on the retail giant signals potential upside of more than 30% from here.
Note that Walmart also currently pays a dividend yield of 0.86%, which makes it even more compelling as a long-term holding at the current price.
How Wall Street Recommends Playing Walmart
Other Wall Street analysts also seem to agree with Ma’s constructive view on Walmart.
According to Barchart, the consensus rating on WMT stock sits at “Strong Buy” at the time of writing, with the mean price target of nearly $140 indicating significant potential upside over the next 12 months.
