Why Walmart (WMT) Stock Is Nosediving

Max Juang /
2023/11/16 11:45 am EST

What Happened:

Shares of retail behemoth Walmart (NYSE:WMT) fell 6.2% in the morning session after the company reported third quarter results and provided full-year adjusted EPS forecast that missed analysts' expectations. This was the major negative driving the stock down. During the earnings call, Walmart noted "a slowdown in purchasing activity in the second half of October." 

On the other hand, revenue outperformed Wall Street's estimates during the quarter, driven by better-than-expected same-store sales growth. Overall, it was a mixed quarter, with the cautious commentary on the near-term demand outlook provided during the earning call likely to raise concerns among investors.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Walmart? Access our full analysis report here, it's free.

What is the market telling us:

Walmart's shares are not very volatile than the market average and over the last year have had no move greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Walmart is up 9.5% since the beginning of the year, and at $157.36 per share it is trading close to its 52-week high of $169.78 from November 2023. Investors who bought $1,000 worth of Walmart's shares 5 years ago would now be looking at an investment worth $1,610.

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