Retail giant Walmart (WMT) is expected to release its Q3 FY26 earnings report next week. Ahead of the print, top TD Cowen analyst Oliver Chen raised his price target on Walmart from $115 to $120 and maintained a Buy rating. The analyst said Walmart is well-positioned to deliver another solid quarter, though its recent rally could limit near-term upside.
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Why Cowen Is Optimistic About Walmart Stock
Chen expects Walmart to beat Wall Street’s Q3 earnings forecast, supported by growth in advertising and membership income, both of which carry higher profit margins. He slightly lifted his earnings estimate to $0.62 per share, one cent above consensus, and noted that stronger operating margins should help the company outperform expectations.
However, Chen cautioned that valuation remains high, with the stock trading around 35 times forward earnings after a 14% gain this year. He noted that even with strong results, the stock may not move much higher unless Walmart raises its full-year guidance.
Nevertheless, the analyst pointed to Walmart’s growing income from advertising and memberships, which earn higher profits. He said these areas are helping the company handle rising costs and keep earnings steady.
Chen added that Walmart is in a strong position, supported by steady sales, a growing online business, and new income streams that can lift future profits.
Is WMT Stock a Buy or Sell Ahead of Q3?
Currently, Wall Street has a Strong Buy consensus rating on Walmart stock based on 28 Buys. The average WMT stock price target of $116.11 indicates 13.18% upside potential from current levels.
