Morgan Stanley Cuts Price Target on Walmart to $125 From $140, Maintains Overweight Rating

The US Court of Appeals vacated the DOT's order to unwind the Delta Aeroméxico joint venture, calling the DOT's analysis arbitrary. The alliance retains antitrust immunity. The court did not rule on competition but on the DOT's process. Delta and Aeroméxico control ~60% of Mexico City-US operations. Walmart froze prices on 4,000+ products in Mexico for 90 days, potentially impacting inflation. Separately, Mexico's workweek will reduce to 46 hours by 2030, increasing employer costs.

Walmart shares dropped 9% on Thursday, the worst single-day decline in four years, after weak guidance and same-store sales miss. JPMorgan maintains an overweight rating, lowering its price target to $125 from $137, citing long-term growth potential and alternative profit pools. 40 of 44 analysts rate the stock buy or strong buy.

Walmart reported its first comparable-sales loss in six years, falling 9% in trading. The company attributed the decline to temporary pricing pressure in its pharmacy business. Other retailers like Home Depot, Lowe's, and TJX also reported weak demand. July retail sales unexpectedly declined 0.6%, and consumer sentiment decreased. The US lost 23,000 jobs in July, missing forecasts. These signs may impact Fed rate decisions and inflation control efforts.

Walmart reported Q2 FY27 advertising revenue growth of 20% YoY, driven by Flipkart ads. International net sales rose 12.8% to $35.2B, with India and China leading operating income growth of 16.6%. E-commerce sales increased 19%, led by Flipkart. Walmart acquired Vibe.co to expand its ad business. Flipkart's Big Billion Days sale shift to Q4 may impact Q3 growth by 100bps.

Walmart reported a 2.6% rise in U.S. comparable sales, its slowest growth in over six years, causing a 9% stock drop. The company attributed the slowdown to lower drug prices and high gas costs. Despite this, Walmart raised its full-year sales and profit outlook. Other retailers also noted cautious consumer spending amid high living costs and rising loan delinquencies.

Walmart reported its slowest quarterly comparable sales growth in six years, attributing the slowdown to high gasoline prices. The company raised its annual sales and profit forecasts but shares fell over 9%, the biggest single-day drop since May 2022. Walmart announced price cuts on 11,000 products, funded partly by $2.9 billion in tariff refunds. Comparable sales grew 2.6%, missing analyst expectations of 3.8%. The company expects fiscal 2027 net sales growth of 4-5% and adjusted earnings per