Costco (NASDAQ:COST) has spent the summer digesting a monster fiscal 2025, and my read of the data is that the setup for the next twelve months is more constructive than the stock price suggests.

Our 24/7 Wall St. price target for the next 12 months is $1,011.88, implying 12.13% upside from the current $902.38 close. The $1,200 level comes into focus further out: our five-year base case hits $1,204.89 by late 2029.

A Rare Discount on a Compounder

Costco is down 2.49% over the past week and 4.44% over the past month, yet still up 5.11% year to date. The pullback follows a Q3 fiscal 2026 report that was quietly excellent: EPS of $4.93 on revenue of $70.53 billion, up 11.58% year over year, with comparable sales of 9.8% reported and 6.6% adjusted for gas and FX.

Membership fees rose 10.7% to $1.373 billion, and the worldwide renewal rate held at 89.7%. The GLP-1 halo is showing up too, from protein snacks to pharmacy market share gains tied to Wegovy and Ozempic inclusion in the member prescription program.

Why Bulls See a Path to $1,125

The bull scenario in our model reaches $1,125.32, a 24.71% total return. The drivers are stacking up. Executive memberships hit 41.2 million, up 9.6%, and now represent 75% of net sales.

Digitally-enabled comp sales rose 21.5% with site traffic up 37%, and AI-generated search traffic grew at a triple-digit rate with the highest conversion rate on the site. Costco is targeting 940 total warehouses by fiscal year-end. The consensus analyst target of $1,072.20 reflects 4 Strong Buy and 19 Buy ratings.

What Could Go Wrong

Our bear case lands at $935.21. The implied forward P/E on our model works out to roughly 45x, which leaves little room for a growth deceleration. Paid membership growth cooled to 4.1%, the softest reading in some time, and core-on-core margins were lower by nine basis points.

It should be noted that bulls have a real counterfactual here: management framed the pricing moves as “strategic, not reactionary,” reinvesting in eggs, beef, and Kirkland to protect long-term pricing authority.

How Costco Compares to Walmart and BJ’s

Walmart (NYSE:WMT) trades at a P/E of 38 with a market cap of $841 billion and fiscal 2026 revenue of $713 billion. Walmart’s FY27 adjusted EPS guidance of $2.80 to $2.87 implies mid-single-digit earnings growth, well below Costco’s double-digit trajectory. That gap is the core justification for COST’s premium.

BJ’s Wholesale Club (NYSE:BJ) is the cleanest warehouse-club comparable at a $11.3 billion market cap, with Q2 comp sales up 11.9% and adjusted EPS guidance raised to $4.60 to $4.80. BJ’s is growing comps faster on a small base, but Costco’s 89.7% renewal rate and scale keep the premium reasonable.

Costco Price Prediction 2026-2030

I’m a buyer at the 24/7 Wall St. price target of $1,011.88 with 90% confidence. Costco is a rare business where the model, the fundamentals, and the analyst community all point the same direction.

I’d add here if the next earnings report shows executive membership penetration ticking above 76%. I’d stay on the sidelines if forward comps excluding gas break below the 6% to 7% range management pointed to.

These projections assume Costco continues executing on membership growth, warehouse expansion, and Kirkland Signature margin gains. Significant upside or downside could come from a special dividend, tariff refund timing, or a step-change in AI-driven search referrals.

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Three consumer-facing dividend payers span retail, tobacco and parts distribution. But only one of them clears the 50-year continuous-raise bar that defines Dividend King status. Walmart (NYSE:WMT) has lifted its payout every year since 1974, and dividend records show an uninterrupted quarterly history through Aug. 21 that supports a streak exceeding 50 years. Pair that pedigree with Altria (NYSE:MO) for ultra-high current income and Genuine Parts (NYSE:GPC) for industrial and aftermarket diversification, and you get a three-name income sleeve where dividend safety does the heavy lifting.

Walmart: The Dividend King in the Bundle

Walmart carries a current dividend yield of 0.93% at a share price of $106.51, with a forward annualized dividend of 99 cents off a most recent quarterly payment of 24 cents paid on Sept. 8. That is a modest headline number, but this is the income grower of the group.

Safety is the story. Walmart’s trailing net income supports the payout at a comfortable multiple, and management said on the fiscal Q2 call that the company expects “double-digit growth in free cash flow this year.” The balance sheet is investment-grade with debt/equity of 0.67, net debt/EBITDA of 1x, and interest coverage of 11x, and management just reauthorized a fresh $30 billion buyback in February 2026 with $25.1 billion remaining after Q2. On top of that, Walmart raised full-year guidance to adjusted EPS of $2.80 to $2.87, and Q2 delivered revenue of $187.94 billion, up 5.94% year over year, with global e-commerce growth of 23%.

The bull case for income investors is compounding. CEO John Furner said “The model’s working and we’re confident in its power to drive durable, long-term growth in shareholder value.” With a market cap near $852.6 billion, Walmart is comfortably the largest Dividend King in this bundle, and the combination of grocery scale, high-margin advertising and marketplace revenue, and consistent dividend hikes turns a small starting yield into meaningful yield-on-cost over a decade of ownership.

Risk: The valuation is rich. Walmart trades at a trailing P/E near 39 and forward P/E near 37, with a P/FCF of 57, so total return depends on continued e-commerce and margin execution rather than multiple expansion.

Altria: Ultra-High-Yield Income With Eyes Open

Altria offers a current dividend yield of 6.45%, placing it firmly in ultra-high-yield territory. The latest declared quarterly dividend is $1.11 per share, payable Oct. 9, up from the prior $1.06, taking the annualized forward payout to $4.44. Altria’s own press materials cite 60 dividend increases in the past 56 years, which is a long record of raises but not a continuous 50-plus-year streak, so treat this as a long-running payer rather than a Dividend King.

Payout coverage looks manageable against earnings power. Altria reaffirmed 2026 adjusted diluted EPS guidance of $5.61 to $5.72, a growth rate of 3.5% to 5.5% from a 2025 base of $5.42, and Q2 adjusted OCI margins in smokable products came in at 64.8%. Cash generation is prolific: Altria returned nearly $3.9 billion to shareholders through dividends and buybacks in the first half of 2026, including approximately $3.6 billion in dividends. Leverage is disciplined at debt-to-EBITDA of 1.9 times as of June 30, in line with the roughly two-times target, though shareholders’ equity is negative at -$3.21 billion in Q1 2026 because of years of aggressive buybacks and asset write-downs.

The bull case is unambiguous: this is a cash-return machine with pricing power. Marlboro retail pricing was up about 7% year over year in Q2, and shares have returned 22.02% year to date on top of the yield. CFO Heather Newman said, “We remain committed to returning significant value to shareholders.”

Risk: The underlying business is in secular volume decline. Management estimated domestic cigarette industry volumes fell 5% in both Q2 and the first half, and Altria took $2.2 billion in non-cash impairments on its e-vapor investments in FY25. Sustaining the dividend requires pricing to outrun volume every year, and that math gets harder over time.

Genuine Parts: Aftermarket Compounder With a Long Raise Record

Genuine Parts yields 3.15% at a share price of around $135, with a quarterly dividend of $1.0625 per share payable Oct. 2 and an annualized forward payout of $4.25. Dividend records show uninterrupted quarterly payments from 1999 through Sept. 4, with annual per-share amounts rising from 26 cents in 1999 to $1.0625 in 2026, consistent with the company’s long-running pattern of annual increases across retail, industrial, and international automotive aftermarket cycles.

Coverage looks healthy on an adjusted basis. Genuine Parts reaffirmed 2026 adjusted diluted EPS guidance of $7.50 to $8.00, projected operating cash flow of $1.0 to $1.2 billion and free cash flow of $550 to $700 million, and returned $288 million to shareholders in dividends during the first half of 2026. Q2 revenue reached $6.54 billion, up 6.0%, and the Industrial segment posted EBITDA growth of approximately 10% with EBITDA margin up 30 basis points to 13.1%. The balance sheet carries cash of $559.1 million and shareholders’ equity of $4.54 billion.

The bull case for income investors is diversification plus optionality. GPC gives you a mix of NAPA auto parts and Motion industrial distribution, and shares have advanced 12.08% year to date even as the automotive backdrop stayed choppy. CEO Will Stengel described industrial results as reflecting “a strong second quarter, reflecting focused teamwork and disciplined execution across the businesses.” The planned separation of Global Automotive and Global Industrial into two independent public companies, targeted for Q1 2027, could unlock a valuation rerating for the industrial side.

Risk: That same separation is the biggest overhang. Restructuring and separation costs pressured GAAP EPS in Q2, with $92.61 million in pre-tax charges, and the post-separation dividend policy of the two successor companies is not yet defined, so long-time holders should expect the combined payout to be reshaped rather than automatically preserved on today’s schedule.

Bundle Takeaway

Walmart anchors the bundle as the verified Dividend King, trading dividend size for dividend durability and reinvestment firepower. Altria brings the 6.1% headline yield, backed by fortress cash returns but tethered to a shrinking combustible-cigarette base. Genuine Parts sits in the middle with a mid-single-digit yield, a long raise history, and a 2027 spin that could reset how the payout is packaged. Together, the three cover retail scale, tobacco cash flow, and industrial-plus-aftermarket exposure, and each one still earns its place in an income sleeve on its own merits (if you want to see how we rank the full Dividend Kings roster by valuation right now, our free report is here).

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Amazon (NASDAQ:AMZN) currently trades near $251.89, while the average Wall Street 12-month price target sits at $328.17, an implied upside of roughly 30%.

Amazon runs the largest US e-commerce operation, the biggest cloud franchise via AWS, a top-three digital ad business, and one of the most aggressive AI infrastructure buildouts anywhere. Its most recent quarter showed AWS growing 37% year over year, its fastest pace in 18 quarters, with AI and custom-chip units each running above a $25 billion annualized rate.

Yet the stock slipped through August and into September even as fundamentals accelerated, and one Street-high target implies far more upside than the consensus figure suggests.

Capex Anxiety Overwhelmed a Blowout AWS Quarter

The single biggest weight on the stock has been capital spending. Q2 cash capex reached $53.1 billion, trailing-twelve-month free cash flow flipped to negative $7.6 billion, and management guided to roughly $200 billion in 2026 capex across AI data centers, custom silicon, robotics, and the Amazon Leo satellite network. All that spend has to be powered, cooled, and networked by somebody, which is exactly the angle we took in a free report on seven AI infrastructure suppliers behind the hyperscaler buildout.

Amazon dropped 7.49% over the past month versus a 1.64% dip in the S&P 500. The selloff was Amazon-specific, driven by capex intensity and returns uncertainty. Headline GAAP earnings were also inflated by a $53.4 billion non-operating gain tied to the Anthropic stake; on a comparable basis, Q2 EPS was $1.88 versus a $1.83 estimate, a modest beat well below the blowout the GAAP line implied.

Loop Capital Sees a $405 Path While Analysts Stay Loaded With Buys

Analyst posture has barely moved. Of 61 rated firms, 15 carry Strong Buy, 44 Buy, 2 Hold, and none Sell. Consensus 2026 EPS has seen 48 upward revisions against a single cut over the past 30 days. The bull side is getting louder.

Sitting at the top of the range is Loop Capital’s Rob Sanderson at $405, which pencils out to roughly 61% upside from the current print. That easily clears the 40% threshold that reframes a target as a high-conviction call. Loop’s thesis rests on three pillars: AWS re-accelerating toward a 20%+ clip on enterprise migrations and high-margin AI workloads across Trainium, Inferentia, and NVIDIA; structural retail margin expansion from regionalized fulfillment and marketplace fees; and a scaling ad engine at roughly 70%+ gross margins.

The supporting data is already visible. AWS backlog reached $496 billion, growing triple digits year over year. Management said the lion’s share of 2027 capacity is already reserved, with meaningful pieces of 2028 spoken for. Advertising grew 26% to $19.81 billion. CEO Andy Jassy told analysts AWS could “very possibly be a trillion dollar annual revenue business for us in time”. The ask is patience across two to three years of heavy spend before monetization catches up.

Amazon Fell Harder Than Its Big-Cap Peers

Amazon’s mega-cap peers held up materially better over the same window. Microsoft (NASDAQ:MSFT) is off 2.07% over the past month at $492.44, with an average target of $572.92 (about 16% upside) on a book of 14 Strong Buy, 38 Buy, 3 Hold. Azure just crossed $100 billion in annual revenue.

Alphabet (NASDAQ:GOOGL) at $332.60 is down 3.19% on the month with a target of $428.07, roughly 29% upside. Ratings run 13 Strong Buy, 45 Buy, 5 Hold, and Google Cloud grew 82% last quarter. It is the closest analog to Amazon’s setup.

Walmart (NYSE:WMT) sits at $105.73 with a $127.42 target, about 20% upside, and slipped 6.43% after cautious tariff-refund reinvestment commentary. Its book: 10 Strong Buy, 27 Buy, 5 Hold, 1 Strong Sell.

Amazon’s 30% consensus upside is the widest in the group before layering on Loop’s 61% Street high, making it the most dislocated name in the peer set.

What the Numbers Show at $251

Amazon trades at $251.89 against a consensus 12-month target of $328.17 built from 61 analysts, 59 of whom rate the stock a Buy or Strong Buy. Year to date, Amazon is up 9.13%, trailing the S&P 500’s 11.15%. Over the past month the stock has fallen 7.49% while the S&P dipped 1.64%. Analyst targets are one input rather than a guarantee, but the revision trend is decisively positive.

Bull and Bear Scenarios for Amazon at $251

The bull case strengthens if AWS keeps compounding above 30% into 2027 as management’s contracted-capacity commentary suggests, if the ad business holds a 20%+ pace, and if the $200 billion capex cycle begins converting into free cash flow by 2028. Those three pillars are what get the stock toward Loop’s $405.

The bear case gains traction if free cash flow remains negative through 2027, if custom silicon adoption stalls while NVIDIA-based rivals take share, or if a tariff-driven consumer slowdown compresses North America retail margins already running near 8%. Anthropic-inflated headline earnings make those risks easier to underestimate.

The setup skews constructive. The AWS backlog, the ad flywheel, and the depth of the buy-side book are notable, and the pullback has widened the risk-reward spread. A return to consensus would deliver a meaningful gain from current levels; Loop’s 60% call sits as the higher-conviction scenario tied to the capex cycle playing out.

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The US economy isn’t on fire, but it is close. It added 162,000 jobs in August.

Determining whether inflation rates are too high is complex. The formula can include interest rates, the CPI, currency exchange rates, and the rate at which wages are growing. Some economists compare prices from 1980 to today’s consumer prices. Some measures include housing. Others do not. Food is generally included, as is fuel.

According to government measures based on CPI, the inflation rate was 8% in 2022. Some of this was because of a spike in oil prices due to the Russian invasion of Ukraine. Another part was due to food prices. “Inflation risk” rose enough that the Fed raised rates seven times that year.

Inflation, by loose consensus, would be CPI and PPI increases of 5% per year. Mortgage rates would matter, as would food and fuel prices. These are at the heart of the cost of living for most people and many businesses.

The BLS reported a 3.4% year-over-year CPI increase in July. Several things had not hit the economy hard yet. The most important of these is probably diesel prices, because they ripple across most of the economy. Diesel prices hit an all-time high today. Trucks move 70% of freight in the US. That includes deliveries to McDonald’s (NYSE: MCD) and Walmart (NYSE: WMT). It increases deliveries to your home. At $5.85, diesel prices are up 58% from a year ago.

Drivers and freight companies will pass along as much as they can from rising fuel prices. Companies that take those deliveries will try to pass them on to consumers. That means inflation shows up in three places—those that transport, those that receive goods, and consumers who buy those goods.

Another example is food prices. Not all of the shortage of farm produce has been passed to the consumer yet. Places like Nebraska have cut yields by 20% for certain crops. In turn, this is reflected in beef prices. Beef cattle are fed by grain. Beef prices are already at or near their highest level in years.

Mortgage rates recently hit a level not matched since July 2025. The fixed-rate 30-year mortgage rate reached 6.71%. Adjustable-rate mortgages are over 7% for a 5/1 ARM. Add to this the S&P CoreLogic Case-Shiller U.S. National Home Price Index, which has risen every month this year.

For good measure, car prices are at a record high, with an average price of $51,820. Car loan interest rates are near 6%.

What is inflation? As much as formulas, it is how people feel. This month’s University of Michigan Survey of Consumers gave a clue. ”Consumer sentiment confirmed its early-month reading, falling about 6% from last month and landing about 11% below a year ago amid continued worries that inflation will remain elevated for the foreseeable future.”

Q.E.D.

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I keep hitting the buy button on Amazon (NASDAQ:AMZN), and after the stock added 10.47% year to date to reach $254.98, I am still adding. The reason is simple. AWS is speeding up on a very large base, and every other part of this business is compounding alongside it. When the biggest cloud franchise on earth is accelerating instead of maturing, I want to own more of it, not less.

Why AWS Alone Justifies Every Share I Buy

Andy Jassy said it plainly on the July call: “AWS is booming right now.” AWS grew 37% year over year to $42.232 billion in Q2, its fastest growth in 18 quarters, and it did so at a 39.4% operating margin. That single segment is now running at a $169 billion annualized revenue run rate with a backlog of $496 billion growing triple digits year over year. As a long-term owner, I read that backlog as revenue that is already spoken for.

The AI numbers under the hood are the second reason I keep buying. Amazon’s AI and chips businesses each eclipsed $25 billion in annualized run rates with triple-digit growth. Anthropic committed to up to 5 GW of Trainium capacity, and OpenAI committed roughly 2 GW starting 2027. Graviton is now used by 98% of Amazon’s top 1,000 EC2 customers. This is what pricing power in silicon looks like.

The third pillar is that the rest of the company is compounding too. Advertising delivered $19.809 billion, up 26%. Consolidated revenue reached $200.606 billion, and operating income climbed 43.24% to $27.461 billion. Analysts have taken notice: the fiscal 2026 EPS consensus has moved to $12.49 from $8.72 just 30 days ago, with 45 upward revisions against one downward.

Why I Skip Microsoft, Alphabet, and Walmart Here

The names a reader reaches for first are Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Walmart (NYSE:WMT). I own some of those too, but my incremental dollar goes to Amazon because no one else stacks a $496 billion cloud backlog on top of a $19.8 billion advertising business growing 26% and a retail engine that grew worldwide paid units 17%. Azure is a fine business, and Google Cloud is real, but I can only see one company delivering “about 80% more than our largest increase ever” in a single quarter of cloud revenue adds. Walmart runs a great store, while Amazon runs Bedrock and Trainium.

A Risk I Am Not Waving Away

Free cash flow turned negative at -$7.6 billion TTM. Q2 capital expenditures hit $54.208 billion, and management has guided to roughly $200 billion of capex for 2026. If AI demand cools, that spending will look premature (the power, cooling, and networking suppliers riding the same wave are the subject of our free AI infrastructure report). Here is why I am still buying anyway: Amazon spends data-center capital two years before monetization begins, servers break even in a little less than three years, and useful lives stretch at least five to six years on chips inside buildings that last 30-plus years. Most AI capacity is contracted for at least five-year terms. That is a rented factory with contracted demand.

What Keeps My Buy Button Active

The lion’s share of 2027 capacity is largely reserved, some 2028 capacity is already spoken for, and Amazon is on track to double power capacity by the end of 2027 versus 2025. Jassy told owners he now believes AWS can become “a trillion dollar annual revenue business for us in time.” I plan to own the shares when it gets there.

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A single-name re-rating inside big-box retail has driven Target far ahead of both the sector and the S&P 500 this year. The SPDR S&P Retail ETF (NYSEARCA:XRT) was down 0.1% year to date to $85.86, going essentially nowhere. Meanwhile, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) was up 12% year to date, comfortably higher but nowhere near Target’s league.

Target (NYSE:TGT) stock was up 66% year to date through Monday’s close. Notably, Target shares are up 0.8% to $162.15 this afternoon, extending a run that has taken the stock roughly to a double off its 52-week low of $81.20.

A path to $200 will be challenging, to say the least. After the 66% run, the average analyst price target already sits below the current share price, and 23 of the 38 analysts covering the stock rate it Hold. That combination reads more like a stock that has priced in the good news than one gathering steam for another leg higher.

What Drove the 66% Run

Two forces did the work. Target’s year-over-year earnings growth was 100.5%, which qualifies as strong earnings acceleration and gave the fundamentals a real footing (we studied a batch of recent runners most investors walked past and pulled out the pattern in a free report). Pair that with the 52-week low of $81.20 and much of this year’s move looks like a recovery from a depressed starting valuation rather than fresh optimism about the retail business.

Target’s Q2 FY2027 report on August 19 sealed the shift. The company reported adjusted EPS of $4.11 against a $2.34 estimate, with revenue of $26.5 billion up 5.3% year over year, comparable sales up 3.8%, and store traffic up 3.6%. Management raised full-year adjusted EPS guidance to a range of $9.90 to $10.90, which includes a $1.65 tariff-refund benefit recognized in Q2.

Walmart Divergence Tells the Real Story

Walmart (NYSE:WMT) stock has provided the cleanest evidence that the Target rally was rotation inside big-box retail rather than a sector-wide bid. The stock was down 5% year to date, a striking split from Target inside the same big-box category. Capital shifted between the two names rather than lifting the group, and the roughly unchanged retail ETF backs that interpretation.

At the same time, Costco Wholesale (NASDAQ:COST) stock was up 9% year to date, a respectable move that still trailed Target by a wide margin. Retail sentiment on Target now leans bullish, but that is a supporting observation rather than a driver of the fundamental story. The retail complex as a group, tracked by the XRT fund, has essentially gone nowhere, which underscores the name-specific nature of the Target move.

What It Takes to Reach $200

Target stock trades at $162.15 against a 52-week high of $170.75. The average analyst price target sits at $161.62, which is below the current share price. Ratings break down as 2 Strong Buy, 10 Buy, 23 Hold, no Sell, and 3 Strong Sell, so the majority verdict is hold-and-see.

Target’s forward EPS of $8.94 puts the implied P/E ratio at 19x. 24/7 Wall St.’s price model sets a one-year base case of $173.32, an optimistic case of $181.42, and a conservative case of $143.25. Even the optimistic one-year case falls short of $200.

The five-year TGT stock price target from that same model is $215.82, with a five-year optimistic case of $228.28, so $200 clears on a multi-year horizon rather than this year. Analyst fiscal year 2027 EPS estimates average $8.10 with a high end of $10.77, and fiscal year 2028 estimates average $9.50. Even the high-end fiscal year 2028 estimate would need a forward multiple in the high teens to justify TGT at $200 per share.

Home and apparel remain underperforming categories, which management flagged as multi-year work rather than a single-quarter fix. Both are high-margin businesses, and their eventual recovery is the earnings lever most likely to sustain a re-rating from here. Without that lever, Target stock has less room to keep expanding its multiple.

What to Watch

The easy part of the recovery has already happened. Analyst consensus says so, the 24/7 Wall St. base case says so, and Target stock is already trading above the average price target with room for disappointment if execution slips in home or apparel. Getting to $200 from here requires the earnings acceleration to persist for years rather than quarters.

Investors can watch for whether upward EPS revisions continue into the October quarter, where 7 upward revisions and no downward revisions have already come through in the past 30 days. Target’s next earnings report will test whether the recent guidance raise holds. Shareholders should size their positions carefully given how much re-rating has already been priced in and how thin the analyst enthusiasm remains at these levels.

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Investors often forget that Amazon (NASDAQ: AMZN) has $700 billion in e-commerce revenue based on its first-half revenue run rate. Since its fourth quarter is by far its largest, the number will probably exceed $750 billion. That will make the e-commerce division as large as Exxon’s (NYSE: XOM) total and larger than Microsoft’s (NASDAQ: MSFT). In fact, including AWS, Amazon was the No.1 company among the Fortune 500, having passed Walmart (NYSE: WMT) last year.

A quarter of Amazon’s e-commerce revenue is “International,” and the balance comes from what it calls “North America.” North America’s operating profit will be about $35 billion this year. International will be about $7 billion. AWS revenue will be $180 billion in 2026, based on the current run rate. Operating income will be approximately $70 billion.

Beyond size, the divisions differ: e-commerce revenue is growing at about 18%. AWS top-line growth is closer to 40%.

Amazon’s market cap is $3 trillion. It is hard, if not impossible, to say how much e-commerce contributes to that value. It’s instructive to look at Walmart with a market cap of $832 billion. Amazon’s e-commerce growth rate is much higher, so move its valuation to $1 trillion.

That means AWS is worth $2 trillion. Compare that to AI giant Anthropic, which has a market value of about $1.8 billion. Anthropic is an AI pure play, which should have about $65 billion in revenue this year. AWS’s “market cap” would be slightly more valuable than the entire market cap of SpaceX.

AWS houses most of Amazon’s AI businesses. That means they carry most of Amazon’s future and almost all of its risk. If AI is the greatest investment in human history, e-commerce is worth very little in comparison. If AI is mostly a poor gamble on hundreds of billions of dollars in data center construction, AWS may be worth very little.

Finally, there is the debate about whether Amazon should be broken into two public companies. Since the relationship between e-commerce and the cloud is relatively small, investors might be better off if they could choose between the two.

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Walmart (NASDAQ:WMT) closed one of its ugliest legal chapters for what amounts to a rounding error. The company agreed to pay $50 million to settle the Justice Department’s civil case accusing its pharmacies of unlawfully filling opioid prescriptions, a threat prosecutors once described as potentially reaching billions of dollars.

Set against Walmart’s roughly $11.7 billion of net income for the six months ended July 31, 2026, that check equals about 0.43% of profit. Walmart admitted no liability and called the payment financially immaterial. The threat shrank dramatically before the check was written, and the stock is modestly cleaner as a result.

How a Multibillion Threat Shrank to $50 Million

The Justice Department once framed this case as potentially generating civil penalties in the billions. What settled looks nothing like that ambition.

A federal judge narrowed the government’s case in 2024, which materially strengthened Walmart’s negotiating position. The case Walmart faced at the end was smaller than the case it faced at the start.

The Justice Department’s announcement framed the resolution around the dollar figure, but the leverage story sits upstream of it.

Walmart out-negotiated a diminished case. The gap between the opening threat and the closing check reflects prosecutors losing the theories that gave the case its size before Walmart wrote any check.

Non-Monetary Terms That Actually Change Operations

The cash is trivial, while the compliance obligations carry real operational weight.

The agreement requires tighter pharmacy oversight and improved monitoring of controlled substance dispensing across Walmart’s pharmacy footprint and mandates a hotline for employees and patients to report suspicious dispensing, an ongoing surveillance mechanism rather than a one-time fix.

For a chain filling prescriptions at scale, procedural controls carry real cost and real deterrence against a repeat federal action. These terms change how the business operates, even if they never show up as a line item in guidance.

Earnings Backdrop That Makes the Settlement Immaterial

Q1 FY27 net income was $5.33 billion, and Q2 was $6.366 billion, dwarfing the settlement by orders of magnitude.

Q2 revenue reached $187.94 billion, with adjusted EPS of $0.81 against a $0.7413 estimate. Walmart raised full-year FY27 adjusted EPS guidance to $2.80 to $2.87, hardly the profile of a company nursing a legal wound.

Global eCommerce grew 23%, and advertising climbed 38%, keeping the margin mix moving in the right direction. CEO John Furner said the team “delivered another good quarter” and pointed to price, speed, and convenience as the long-term drivers.

Does the Stock Actually Have Less Legal Overhang Now?

Closing one case leaves Walmart’s broader opioid liability intact. The separate $3.1 billion agreement with state and local governments from 2022 still stands.

WMT closed at $103.09 on August 28, 2026, down 9.53% over one month and 6.88% year to date. The analyst target sits at $127.95, with 28 buy ratings and 9 strong buy ratings against a single sell rating.

The recent pressure stems from tariff-refund reinvestment and maximum fair price regulation weighing on pharmacy comps, not this settlement. The federal overhang is smaller today than it was a week ago, a real, if narrow, improvement for shareholders watching the legal file.

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Walmart’s fiscal Q2 2027 report on August 20 reset how the market prices one of the safest names in retail. Walmart (NYSE:WMT) stock is down 10% over the past month, its worst stretch in more than a year, while the broader retail tape barely budged. The SPDR S&P Retail ETF (NYSEARCA:XRT) slipped just 3% over the same window, a gap that says this selloff is Walmart-specific.

Walmart’s peers sharpen the divergence. Costco Wholesale (NASDAQ:COST) stock is down 4% over the past month, roughly in line with the retail benchmark. Target (NYSE:TGT) stock, meanwhile, is up 13% over the same stretch, a rare reversal of the usual peer ordering in big-box retail.

The move is anchored to a single dated session. Walmart reported its fiscal Q2 2027 results on August 20 and shares closed 9% lower that day, accounting for much of the month’s decline in Walmart stock.

Earnings Beat Meets Cautious Guidance

The headline numbers looked solid. Walmart’s revenue rose 5.9% to $187.94 billion against expectations of $186.77 billion, adjusted earnings came in at $0.81 per share, and global e-commerce sales jumped 23%. Membership fee revenue rose 17% and global advertising revenue climbed 38%.

Walmart also raised its full-year outlook, guiding net sales growth of 4% to 5% versus a prior 3.5% to 4.5%, and adjusted EPS of $2.80 to $2.87 against a prior $2.75 to $2.85.

The friction sat in one line. Walmart’s U.S. comparable sales grew 2.6% against the 3.5% Wall Street expected, partly reflecting an 0.8% headwind in health and wellness as drug price caps took effect. Third-quarter guidance of 3% to 3.8% net sales growth also landed softer than hoped, and that combination, a solid quarter with a light comp number and cautious near-term sales guidance, is what drove the selling.

Chief Financial Officer John David Rainey told CNBC, “Our business is strong. We feel really good about the progress we’re making.” On the subject of shoppers, Rainey stated, “But consumers are still spending, and real wage growth is keeping pace, and so they’ve been very resilient in this environment”.

Target’s Rally Isolates the Story

Target’s month is the tell. Its shares rose 13% over the same stretch Walmart fell 10%, and the XRT decline of only 3% confirms that the sector wasn’t being unloaded. When the largest and best-positioned operator underperforms a smaller competitor by this margin over a single month, the market is repricing one company’s growth rate rather than the outlook for retail.

Costco stock, down 4% over the month, fits neatly alongside the XRT figure and reinforces the point. The evidence points to investors marking down Walmart’s specific U.S. comp trajectory while leaving the rest of the aisle alone.

Is It Time to Sell?

Both sides deserve fair weight. The bull case is that the underlying business is intact: management raised its full-year outlook, e-commerce grew 23%, advertising climbed 38%, membership income rose 17%, and Walmart continues to gain share across income tiers. Those are the compounding levers that drove the multi-year rerating in Walmart stock, and none of them broke this quarter.

The bear case is narrower but real. A decelerating U.S. comparable-sales number is the one metric that has historically driven the stock’s premium multiple, and Walmart shares still carry a P/E ratio of 39x. Third-quarter guidance implies more pressure before the story eases, since management plans to reinvest approximately $2.9 billion in tariff-refund gains into price rather than let them flow to operating income.

What to Watch Next

That framing pushes the answer toward risk management rather than a directional call. Investors who are already sized appropriately for a defensive compounder have a business that just raised its outlook. Those positioned as if Walmart were a growth stock now hold shares whose near-term comp story is genuinely softer, and trimming their exposure to a defensive weight is reasonable.

Shareholders can watch for whether Walmart’s Q3 comps stabilize as tariff-refund reinvestments cycle through pricing. The next Walmart report will confirm whether the recent deceleration was a regulatory air pocket or the start of a broader slowdown.

Walmart’s earnings reaction also sets up the near-term chart. Traders may want to keep an eye on whether Walmart stock reclaims its pre-earnings level of $114, the mark that framed the reaction and now sits as overhead resistance.

The post Walmart Just Dropped 10% in a Month. Is It Time to Sell? appeared first on 24/7 Wall St..

Walmart’s post-earnings tumble has cut roughly 12% off shares since May, and the reaction to a beat-and-raise report looks overdone.

Walmart (NASDAQ:WMT) currently trades at $105.09, and my 24/7 Wall St. price target lands at $120.95, implying 15.17% upside over the next 12 months. Model confidence is high at 90%, and the recommendation is buy.

Walmart raised full-year guidance across sales, operating income, and EPS, yet trades below both its 50-day moving average of $113.32 and its 200-day at $118.54. That gap between fundamentals and price is the dislocation the model flags.

Why Shares Sold Off Despite a Beat and Raise

The Q2 FY27 report on August 20, 2026 delivered adjusted EPS of $0.81 versus $0.7413 expected and revenue of $187.94 billion, up 5.94% year over year. Shares fell 9.15% on the earnings report. WMT is down 6.64% over the past week and 12.03% since May 21.

Two issues drove the reaction. Q3 guidance came in soft at $0.62 to $0.64 adjusted EPS as tariff refund benefits get reinvested into price rollbacks.

Maximum Fair Pricing regulation is creating a 125 basis point pharmacy headwind to U.S. comps. Reddit sentiment framed WMT’s weakest sales growth in six years as a warning sign.

Bull Case: A Path to $144

Global e-commerce grew 23%, Walmart U.S. marketplace sales jumped 52%, global advertising rose 38%, and membership fee revenue climbed 17% globally.

These high-margin engines are re-mixing WMT toward a profile that deserves a richer multiple. CFO John David Rainey said, “We think we have a tremendous opportunity to continue to change and see our margins drift up over time.”

Consensus target is $128.43 with 9 Strong Buys, 28 Buys, 5 Holds, and 1 Sell. My bull-case scenario points to $144.50 if margin expansion and share gains accelerate.

What Could Go Wrong

Higher fuel prices are adding over $2 billion in incremental costs. Maximum Fair Pricing is expected to cost 900 basis points in Health & Wellness. Q3 operating income growth is guided to just 2% to 4% as refund dollars get spent on price.

Management expanded rollbacks from 7,000 to 11,000 during the quarter, and CEO John Furner said, “We’re doing this because we think it has a lasting durable impact.” My bear-case path takes the stock to $110.26, still above current levels.

How Walmart Compares to Costco and Target

Costco (NASDAQ:COST) is the natural growth comparison. Q3 FY26 revenue rose 11.58% to $70.53 billion, with comparable sales up 9.8% and digital comp up 21.5%, roughly double Walmart’s pace.

But COST’s $426.8 billion market cap and premium multiple already price that scarcity. Walmart’s forward P/E of 36 looks reasonable given accelerating digital, marketplace, and ad mix.

Target (NYSE:TGT) is the value contrast. Q2 FY27 revenue of $26.54 billion grew just 5.3%, and adjusted EPS of $4.11 included a $1.65 per share IEEPA tariff refund windfall.

Comparable sales grew 3.8%, similar to WMT’s 2.6%. TGT’s $74 billion market cap reflects inconsistent execution. Walmart earns a durability premium, making our $120.95 target reasonable.

Why Walmart Looks Mispriced Here

My 24/7 Wall St. price target is $120.95, my recommendation is buy, and my confidence is 90%. Management raised full-year guidance in the same report the market punished, and growth engines that matter for the next re-rating are compounding above 20%.

The setup looks constructive for investors who can accept another quarter of margin noise as tariff refunds get reinvested. The picture darkens if Maximum Fair Pricing pressure spreads beyond pharmacy. The sell-off looks like an opportunity.

Walmart Price Prediction 2026-2030

Here is where our model projects WMT could trade if current trajectories hold.

These projections assume Walmart continues executing on omnichannel expansion and margin mix improvement. Upside could come from advertising and membership scaling faster than modeled; downside risk sits with prolonged consumer softness and structural pharmacy pressure.

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Half of Americans live paycheck to paycheck.

Low-end retailer Kohl’s (NYSE: KSS) announced good earnings. Comparable store sales and revenue each dropped less than 1%. That put revenue at $3.3 billion for the most recent quarter. EPS was slightly off at $1.34. The company lifted guidance. Kohl’s got $150 million from tariff refunds.

The trouble at Kohl’s and many other retailers could spread across the economy. It showed up in McDonald’s (NYSE: MCD) earnings and in Walmart’s (NYSE: WMT) as well. The low-income consumer is limping. Much of this is due to gas prices. But it goes deeper. Inflation isn’t gone and, in many cases, wages aren’t keeping up.

They call the problem a K-shaped recovery. The problem is that upper-income people with money to spend cannot carry the entire US economy. If the lower- and middle-income parts buckle enough, GDP suffers. Most of it is based on consumer spending.

Gas is not the only thing that will drag consumers down. Diesel prices are up over 40% year over year. That price gets passed on to companies that rely on trucks for freight. Trucks deliver about 70% of the freight shipped in the US. Blame the blockade of the Strait of Hormuz.

And blame the blockage for rising agricultural prices. Part of what transits the Strait is urea and ammonia, which are used to make nitrogen fertilizer. Farmer products become more expensive. That is also passed along to the consumer. Add all these up, and the consumer is in trouble, and that trouble will get worse.

Add McDonald’s and Kohl’s and Walmart together. A recession is already underway in the low-income part of the US economy.

Half of Americans live paycheck to paycheck.

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Speaking on CNBC, JPMorgan Private Bank’s Stephen Parker pushed back against the idea that this year’s rally is being carried entirely by the largest Magnificent-7 companies: “I think we are seeing a broadening in market leadership. For a long time it was all about the Mag-7. This year the Mag-7 is barely up. And yet markets are continuing to push to new highs. And while tech continues to be a leader, we’re seeing other sectors like industrials and utilities taking the lead as well.”

Parker framed the rotation towards infrastructure providers: “You’ve seen a transition in market leadership around this AI story. For a number of years it was all about the hyperscalers. This year it’s transitioned to more about the infrastructure providers.”

Infrastructure Companies Are Crushing the Market

Quanta Services (NYSE:PWR) embodies Parker’s infrastructure thesis. Q2 adjusted EPS of $4.24 beat the $3.03 consensus by 39.93%, revenue reached $9.56 billion, up 41.1% year-over-year, and backlog hit a record $53.44 billion. CEO Duke Austin said Quanta is compounding “as our customers accelerate investment in the electric grid, power generation and mission-critical infrastructure that underpin the economy.” Shares are up 43.14% year to date.

GE Vernova (NYSE:GEV) posted Q2 orders of $24.2 billion, up 88% organically, with total backlog at $176 billion and data-center orders exceeding $5 billion year-to-date, more than double full-year 2025. CEO Scott Strazik called the electric power industry “in the early stages of a multi-decade growth opportunity” and expects at least 125 gigawatts of gas equipment under contract by year-end 2026. GEV is up 42.06% YTD.

Eaton (NYSE:ETN) grew Q2 revenue 21.4% to $8.53 billion, with data-center sales up about 65%. Management sized US data-center backlog at 307 gigawatts, or 15 years of backlog at 2025 build rates. CEO Paulo Ruiz said “data centers remain a key growth driver” across broad end markets. Eaton shares have gained 29.53% YTD.

Networking players like Cisco Systems (NYSE:CSCO) show the opportunity on the connectivity side. CEO Chuck Robbins described a “multi-year, multi-billion dollar networking super cycle“ and booked $4 billion in AI infrastructure orders in Q4 and $9.3 billion for FY2026. Cisco guided FY2027 AI infrastructure revenue to $7.5 billion. Shares are up 46.33% YTD.

AI Is Driving Profitability Outside the Tech Sector

Parker noted how AI is driving legitimate business results across the market: “It’s not just about AI as the driver from a capital spending perspective, but it’s AI as a driver for growth and efficiency in companies and other industries.”

Walmart (NYSE:WMT) exemplifies this. Q2 FY27 adjusted EPS of $0.81 beat the $0.74 consensus, gross profit rate expanded 96 basis points to 25.4%, and global advertising grew 38%. CEO John Furner said Walmart believes “AI will improve nearly every part of our business by making shopping better and our associates work easier.” Walmart also flagged competitive pressures from AI technologies as a risk.

Consumer Spending Driving Broad Strength

Parker also drew a line between consumer sentiment and behavior: “When you actually look at what the consumers are doing rather than what they’re saying, spending continues to be robust. The banks are talking about continued loan demand.”

JPMorgan’s (NYSE:JPM) Q2 backed him up, with CCB revenue at $20.3 billion, up 8% year-on-year, average loans up 10%, and net new checking growth above 500,000 accounts.

Key Takeaways

The strongest evidence for Parker’s broadening thesis is the record backlogs building across power, grid, and networking companies. If those orders continue converting into revenue while consumer spending remains resilient, the next stage of the AI rally could extend into the broader market.

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Costco (NASDAQ: COST) trades at $961.15, and our proprietary model sees moderate room to run. The 24/7 Wall St. price target for Costco is $1,024.41 over the next 12 months, implying 6.58% upside.

Our recommendation is buy, with a 90% confidence level. What drives the call is a membership and digital engine Wall Street still treats as secondary.

24/7 Wall St. Price Target Summary

Membership Fees Drive Growth

Costco is up 1.88% over the past week, 3.89% on the month, and 13.14% year to date.

The May Q3 report delivered EPS of $4.93 on revenue of $70.53 billion, up 11.58% year over year, with net income climbing 15.19%. Membership fee income hit $1.373 billion, up 10.7%, paid Executive memberships reached 41.2 million, and digitally enabled comparable sales jumped 21.5% as site traffic surged 37%.

Why Bulls See a Breakout

The bull case rests on a compounding engine. US and Canada renewal is 92.2%, worldwide renewal is 89.7%, and Executive members now drive 75% of sales. Management sees 30 plus net new warehouses annually, with China, Korea, Japan, and the UK identified as long runways.

Digitally enabled comps of 21.5%, AI-driven traffic growing at triple-digit rate, and a new Google Commerce Media and YouTube retail media partnership layer high-margin income on warehouse economics. Our bull-case scenario values the stock at $1,130.46, a 17.61% total return. The average sell-side target sits at $1,077.31 with 23 positive ratings versus 2 negative.

What Could Go Wrong

Valuation is the key risk. Costco trades at 48x trailing earnings and 42x forward, with a PEG of 5. Any deceleration in comps or membership growth could trigger multiple compression. Management flagged tariff impacts, resin inflation, memory-chip costs, and Middle East shipping risk.

Core-on-core margins slipped nine basis points as Costco reinvested in lower prices, a deliberate move designed to widen Costco’s value gap. Our bear-case path lands at $943.98, a modest 1.79% pullback.

How Costco Compares to Walmart and BJ’s Wholesale

Walmart (NYSE: WMT) is the most relevant scale comp. Walmart’s FY27 Q2 delivered adjusted EPS of $0.81 on revenue of $187.94 billion, and the stock trades at a trailing P/E near 39. Costco commands a materially higher multiple because renewal rates, Executive penetration, and digital comps outpace Sam’s Club.

BJ’s Wholesale Club (NYSE: BJ) is the pure warehouse-club comp. It posted Q2 FY27 EPS of $1.36, a 16.52% beat, with membership fee income up 9.9% and FY26 EPS guidance of $4.60 to $4.80. BJ’s is executing, but its $12.19 billion market cap and smaller international runway make Costco’s premium defensible.

Membership Moat Anchors the Bull Case

The 24/7 Wall St. model rates Costco a buy with a price target of $1,024.41 at 90% confidence. The tipping factor is membership. High-margin recurring income compounding at double-digit rates, combined with a 92.2% renewal rate in the core market, is the closest thing retail offers to a subscription business.

The 200-day moving average sits at $959.29, a technical reference point for accumulation setups. Key signals to monitor include comparable traffic slipping below 2% or Executive penetration stalling.

Costco Price Prediction 2026 to 2030

These projections assume Costco continues executing on membership growth, international warehouse expansion, and digital acceleration. Significant upside or downside could result from tariff regime shifts, a China ramp faster than modeled, or compression in consumer-defensive multiples.

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Walmart (NASDAQ:WMT) currently trades at $106.53, while Wall Street’s consensus price target sits at $128.43. That leaves the retail giant priced about about 20% below where the average analyst thinks it belongs.

One respected voice sees far more upside. Tigress Financial’s Ivan Feinseth carries a $155 Street-high 12-month target on the shares, an implied gain of roughly a meaningful premium. That call rests on Walmart’s shift from a low-margin retailer into a company generating real profit from advertising (Walmart Connect), data analytics (Luminate), membership, and marketplace.

The dislocation is unusual for a stock this defensive. Walmart carries a beta of 0.61 and just raised full-year guidance, yet shares are underperforming a rising market.

A Guidance Raise That Sparked a Selloff

Shares fell 6.64% in the week after Walmart’s Q2 FY27 earnings report despite an EPS beat and raised outlook. Adjusted EPS came in at $0.81 versus a $0.7413 estimate, and management lifted full-year adjusted EPS guidance to $2.80 to $2.87.

The composition of the beat was the issue. Roughly 750 basis points of Q2 operating income growth came from IEEPA tariff refunds, and management said it will reinvest most of that windfall into lower prices during the back half. That produced a Q3 adjusted EPS guide of just $0.62 to $0.64, layered with a Flipkart Big Billion Days timing shift and a 125 basis points pharmacy comp headwind tied to maximum fair pricing regulation.

Retail zeroed in on the top line. A viral Reddit thread titled “Walmart Posts Weakest Sales Growth in Over Six Years” pushed sentiment scores into the high 20s across stocks and stockmarket subreddits. The move was company-specific. Peers held up or rallied.

Why Analysts Stand By $155 and $128

The Street barely flinched. Of the analysts covering Walmart, 9 rate the stock Strong Buy, 28 Buy, 5 Hold, and 1 Sell, a heavy accumulation tilt. Feinseth’s $155 sits at the top of the range on four pillars: high-margin ad and data revenue expanding operating margins, e-commerce scale from Walmart+ and store-fulfilled delivery, automation lowering fulfillment costs, and continued grocery share gains from higher-income households.

Q2 backed the thesis. Global advertising grew 38%, U.S. marketplace sales jumped 52%, global e-commerce rose 23% and now represents 24% of net sales, and membership fees grew 17%. Management said U.S. e-commerce hit double-digit incremental margins in the first half. That mix shift is exactly what the bull case rides on.

CEO John Furner told analysts, “The model’s working and we’re confident in its power to drive durable, long-term growth in shareholder value.” Jim Cramer summarized the sentiment more bluntly in July, calling Walmart “one of the greatest companies on earth.” Recent analyst updates have been reiterations, not cuts. The 45% upside to Feinseth’s number is an aggressive outlier, though, not a base case.

Costco Held Firm, Target Ripped, Kroger Recovered. Walmart Sank Alone.

The peer group did not sell off with Walmart. Discount and grocery retail actually rallied, leaving WMT as the clear outlier.

Costco (NASDAQ:COST) trades near $971.40 against an average target of the consensus target, implying roughly 11% upside. Costco is up 13.14% year-to-date with a mostly bullish rating mix.

Target (NYSE:TGT) sits at $169.89 after a 78.51% year-to-date rip on a blowout Q2, trading above its consensus target of its consensus target. Analysts are stuck at a cautious rating mix.

Kroger (NYSE:KR) trades at $59.08 against a target of its consensus target, roughly 19% upside, with a constructive rating mix.

The largest analyst-implied upside across the group sits with Walmart, both at consensus and at Feinseth’s Street high. Unusual for a defensive mega-cap.

Data Snapshot: A Staple Lagging a Rising Market

Walmart is down 3.81% year-to-date and off 6.64% over the past week. The S&P 500 is up 11.96% over the same year-to-date stretch, roughly a 16 point gap against a stock most investors own for ballast.

Against 43 covering analysts, consensus $128.43 implies about 20.6% upside and Feinseth’s $155 implies about 45%. The trailing one-year return shows +10.9%, so the damage is concentrated in the post-earnings reaction.

My Take: Attractive Setup, Not Riskless

The bull case works if the Q3 guide proves conservative and the tariff-refund reinvestment cycle produces the traffic and share gains management describes. The path back to $128 and eventually $155 runs through advertising and marketplace scaling above 30%, e-commerce sustaining double-digit incremental margins, and grocery rollbacks converting into permanent share gains.

The risk case triggers if the price investment cycle turns into margin donation. A forward P/E near 36 leaves no cushion if operating income growth stalls in the 2% to 4% range guided for Q3. Layer on the pharmacy comp headwind, fuel costs running more than $2 billion above plan, and Q2 net income that fell 9.39% year-over-year, and the risk becomes concrete.

I lean cautiously bullish. The 20% consensus upside is credible given the business model shift and ongoing buyback. Feinseth’s 45% call needs margin expansion the market is not ready to price in yet. This looks like an opportunity rather than a value trap, but a slow-burn one.

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At $106.49, Walmart (NYSE:WMT) trades at a level that reframes the risk/reward math for long-term compounders. The stock has slid from a 52-week high of $134.84 back into the low $100s, resetting the setup for anyone evaluating a core position.

Walmart runs the largest retailer in the world, anchored by U.S. supercenters, Sam’s Club, and a fast-growing international footprint. The story that matters now is how much of the profit engine sits outside four walls. Advertising, marketplace fees, and Walmart+ memberships are scaling on top of grocery traffic, and management is reinvesting tariff refunds into price to widen the moat.

Why the Pullback Rewires the Setup

Shares are down 6.64% over the past week and 3.81% year to date, even after Q2 beat expectations. That gap versus the index is what creates the entry.

Higher-Margin Flywheel Is Doing the Heavy Lifting

Q2 FY27 delivered adjusted EPS of $0.81 against a $0.73 estimate on revenue of $187.94 billion, up 5.94% year over year. Global advertising rose 38%, Walmart Connect climbed 43%, membership fees grew 17% globally, and U.S. marketplace sales jumped 52%. CFO John David Rainey said “E-commerce and related businesses offer compelling growth, and we are consistently generating strong incremental margins.”

Management raised the full-year outlook to 4% to 5% sales growth and adjusted EPS of $2.80 to $2.87, and analysts carry a $128.43 target. With 9 Strong Buy, 28 Buy, 5 Hold, and 1 Sell ratings, sell-side conviction is high, though targets remain just one input.

Valuation and Consumer Cracks Are Real

The bear case starts with price. Walmart trades at 39 times earnings and 36 times forward earnings, with a 0.89% dividend yield and a 1.76% free cash flow yield. That is a full multiple for a business with a 3.07% net margin. Net income fell 9.39% year over year in Q2, and inventory is up 6.7%.

Consumer sentiment sits at 49.5, well under the 60 recessionary threshold, and July retail sales dropped 0.6% month over month. Maximum Fair Pricing pharmacy rules are already carving 125 basis points off U.S. comps.

Why Patience Has a Place Too

The hold case is that Q3 guidance calls for adjusted EPS of just $0.62 to $0.64 as tariff refund reinvestment pressures margins. Buyers who wait for a print in the mid $90s near the 52-week low of $94.62 would get a cleaner valuation and a clearer read on holiday demand.

Data That Frames the Decision

Walmart currently trades at $106.49 against a consensus target of $128.43, implying roughly 21% upside across 43 covering analysts. Over the past year the stock has gained 10.9% versus 18.31% for the S&P 500, and year to date it trails badly at negative 3.81% against the S&P’s 11.96% gain. The $0.99 forward annual dividend extends a payout streak that has climbed every year since 1999.

Why This Price Is a Compounder’s Entry

At $106.49, the setup favors long-term compounders. Here is why.

The path to appreciation runs through mix shift. Ads, membership, and marketplace are growing 20% to 50%, expanding incremental margins at twice the rate of the base business. As those revenue lines compound, the P/E argument softens because forward earnings power keeps repricing higher.

Dollar-cost averaging fits this setup. Building exposure incrementally from the recent pullback out of $135 toward $106 avoids timing a Q3 margin dip while still capturing the reinvestment cycle. If shares slide toward the $94 area, accumulation becomes more attractive on a risk/reward basis; if they rally through $128, the thesis is already working.

What would invalidate the call: sustained comp deceleration below 2%, an ad-growth stall under 25%, or free cash flow rolling over. Absent those, this remains the kind of quality name long-term investors tend to consider on weakness.

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Walmart (NYSE:WMT) beat adjusted EPS expectations at $0.81 against a $0.7413 estimate, grew revenue 5.94% to $187.94 billion, and raised full-year sales guidance to 4% to 5% from 3.5% to 4.5%. The stock still fell 9.82% over the past week, closing at $103.70, and is down 6.33% year-to-date.

On CNBC on Friday, Michael Zakkour of 5 New Digital argued the selloff is about sentiment rather than fundamentals. “Consumers are finally starting to pull back, and they’re getting a lot more choosy about where they spend and how they spend it,” he said, adding that “I think all three of them are going to have strong holidays. And in fact, I think they’ll be beneficiaries of this shift in this cautiousness. People aren’t going to buy up into premium or luxury in this market.”

He is partly right. The drawdown is a verdict on the guide, and the guide is the one that deserves attention.

Walmart’s Quarter Was Fine, but the Guide Is the Real Story

Walmart’s beat was heavily flavored by tariff refunds. Gross profit rate improved by 96 basis points to 25.4%, and management said much of that benefit will be passed back to shoppers rather than retained as margin.

You can see the tradeoff clearly in the next quarter. Q3 adjusted EPS is guided to 62 to 64 cents, and Q3 sales growth is expected at 3.0% to 3.75% in constant currency, with a timing shift of Flipkart Big Billion Days creating a headwind of over 100 basis points.

Then there is the spending line. Capex was raised to roughly 4% of net sales, and management flagged more than $2 billion of incremental fuel-related costs above original assumptions. Those decisions compressed the near-term earnings the market was pricing in.

The 8-K itself lays this out plainly in the SEC filing. The setup is a company deliberately choosing share gains over near-term margins, which is a fine strategy for a business trading at a P/E near 38, but only if you already believe the share gains will materialize.

Where Zakkour’s Trade-Down Thesis Actually Holds

Target (NYSE:TGT) is the clearest evidence for his view. Comparable sales grew 3.8%, with traffic up 3.6%, and the stock is up 73.84% year to date, a pattern consistent with a discerning, rather than broken, discretionary consumer.

Michael Fiddelke framed the momentum in the release, saying “Second quarter results build on the encouraging momentum we saw in the first quarter, giving us increasing confidence that our strategy is resonating with our guests.” That is a company where a choosier shopper chooses to walk through the door.

The home-improvement names complicate the picture. Home Depot (NYSE:HD) posted 1.7% comps and $4.92 in adjusted EPS, while Lowe’s (NYSE:LOW) delivered its fifth consecutive quarter of positive comp sales with $4.40 adjusted EPS, yet HD is down 13.35% over the past year, and LOW is down 13.75%.

Zakkour’s quote that “it’s hard to not love Walmart” and that Walmart and Amazon are gold standards is fair on the operating model. The market accepts the model and is repricing what a lower-margin, higher-capex version of it should earn through a soft holiday.

What to Watch Before You Decide Who’s Right

The rollback data will tell you a lot. Walmart U.S. had more than 11,000 rollbacks in the quarter, up from 7,200 at the end of Q1, and CFO John David Rainey said: “There is a bit of a cumulative benefit that comes when you lower prices.”

If those price cuts produce the durable share gains management describes, Q4 comps should accelerate above the Q3 guide. If they do not, the market will have correctly diagnosed a company paying full price for the same middle-income shopper Target is also winning.

Watch fuel too. Rainey said, “You can tell when fuel prices increase and got above $4 and perhaps there’s a psychological impact to that, that there are choices that consumers are making,” and that pressure lands hardest on Walmart’s core customer.

Zakkour is likely right that discount wins this holiday. The harder question is whether Walmart, at its current multiple and rising capex, wins enough to justify what shareholders were paying for at $131 three months ago. The Q4 report will settle it.

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Walmart did what it was supposed to do last Thursday. Walmart (NYSE:WMT) posted revenue of $187.9 billion versus $186.8 billion expected, growth of 5.94% year over year, and adjusted EPS of $0.81 versus $0.7413 expected. Both lines cleared the bar. The stock still had its worst single session since 2022.

Shares fell from a $114.03 close on August 19 to $103.59 on August 20, a 9.15% one-day drop, and finished the week at $103.70 on Friday, August 21. Walmart is down 6.33% year to date and up 6.75% over the past year. The market used Walmart’s numbers to re-read the consumer.

Crack One: Comps Decelerated Sharply

Walmart U.S. comparable sales grew 2.6%, led by transactions, down from 4.8% in the year-ago quarter. The Wall Street Journal characterized this as Walmart’s weakest sales growth in over six years. In plain language: the same stores are ringing up more visits but a much smaller top-line gain. When the country’s largest retailer decelerates that hard, it is telling you something about the shopper.

Crack Two: Walmart Itself Guided the Quarter Lower

Third-quarter revenue guidance came in at $185.6 billion at the midpoint versus $188.3 billion expected, roughly 1.4% light. Constant-currency operating-income growth is guided to just 2.0% to 4.0%, versus 28.78% operating-income growth this quarter. Management even asked investors to evaluate the second and third quarters together because tariff-refund benefits are being reinvested into price. The company is planning around that softness, not just observing it in the rearview.

Crack Three: Shoppers Are Trading Down at the Pump

CFO John David Rainey said the company saw “some incremental pressure on the consumer relative to the beginning of the year with higher fuel prices,” adding that “June was a little more obvious as we look at the quarter in terms of customers making tradeoffs.” He was blunt about the mechanism:

“You can tell when fuel prices increase and got above $4 and perhaps there’s a psychological impact to that, that there are choices that consumers are making.”

Regular gas averaged $4.05 per gallon on August 17, 2026, and Walmart flagged more than $2 billion of incremental fuel-related costs this year versus its February plan.

Walmart Problem, or Consumer Problem?

Global eCommerce grew 23%, marketplace sales rose 52%, and Walmart+ hit record Q2 net additions. The engine is intact. What broke Thursday was the story that Walmart could keep compounding regardless of the household budget. The Dow fell 704 points that session, with coverage attributing the decline primarily to surging Treasury yields and oil prices. Walmart was a passenger in that session.

This reads as a consumer problem showing up first at the country’s biggest register. What to watch next: the Q3 comparable-sales report. If it does not reaccelerate above 2.6% once price investments hit shelves, the crack becomes the story.

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Many large retailers posted good-to-very-good same-store sales last quarter. Even Target (NYSE: TGT), which is usually weak, had same-store sales up 3.6%. Walmart’s (NYSE: WMT) figures were well below that trend. US comparable store sales rose 2.6%, the slowest in six years. (Notably, e-commerce was up 24%.)

Given its e-commerce success and the industry-wide shift away from in-store shopping, Walmart may have too many locations. Walmart had 4,516 US locations in 2015. That number is currently about 4,615.

Walmart brags that it has enough stores so that 90% of Americans live within 10 miles of a Walmart. Walmart has 113 stores in its home state of Arkansas. In several states with much larger geographic footprints, that figure is smaller. New York, for example, has 98. Maybe it doesn’t work that way. Maybe people in the South are more likely to shop at Walmart.

It is odd, however, that in a retail world increasingly dominated by e-commerce, Walmart’s store count has not changed in over a decade. Although it is not an exact comparison, Amazon’s (NASDAQ: AMZN) revenue has grown by 3x during that time. (Granted, AWS is part of that, but it is much smaller than the e-commerce operation.)

Retailers with weak numbers close stores. At least, that’s the trend. However, in a world where retail is driven as much by e-commerce as by in-store traffic, Walmart’s store count is a strange pattern.

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Each year, September rolls around, and it tends to be the worst month for stocks. Historical data show that September is the worst-performing month for the stock market. Since 1928, the S&P 500 has averaged a negative return of about 0.7% to 1% in September, making it the weakest month of the year. Institutional investors and large funds often sell off stocks near the end of the third quarter to lock in gains or adjust asset allocations. Some fund managers take advantage of improved liquidity after the summer months to tax-harvest portfolios by selling losers. In addition, traders return from vacations to reevaluate portfolios and often move to more defensive risk-off strategies.

The technical team at J.P. Morgan sees a storm brewing and published reports had this to say:

JPMorgan warns that the S&P 500 faces downside risks heading into an autumn selloff. Technical strategist Jason Hunter highlights deteriorating market internals, a lack of conviction in tech/AI leadership rotations, rising Treasury yields, and defensive shifts as signals of late-summer and early-fall weakness. Mr. Hunter highlighted a growing divergence between AI hardware/chip makers and heavy AI capital expenditure spenders, noting it mirrors the market behavior seen right before the 1999–2000 tech crash.

The J.P. Morgan team is positive on five defensive sectors that growth and income investors concerned about a major sell-off should consider. All still offer growth potential, but are far less volatile than the technology and AI/data center sectors. These are the five sectors; we have selected one stock from each that J.P. Morgan analysts have rated Overweight.

Utilities & Energy Infrastructure: GE Vernova

The J.P. Morgan team is bullish on this company, which has been designated as one of the firm’s highest-conviction ideas for structural power demand and electrification infrastructure, with a tiny 0.17% dividend. GE Vernova (NYSE:GEV) operates in the electric power industry, providing products and services that generate, transfer, orchestrate, convert, and store electricity. It designs, manufactures, delivers, and services technologies to create a sustainable electric power system, enabling electrification and decarbonization.

GE Vernova operates four segments:

• The Power segment includes the design, manufacture, and servicing of gas, nuclear, hydro, and steam technologies, providing a critical foundation of dispatchable, flexible, stable, and reliable power.
• The Wind segment includes wind generation technologies, including onshore and offshore wind turbines and blades.
• The Electrification segment includes grid solutions, power conversion and storage, and electrification software technologies required for the transmission, distribution, conversion, storage, and orchestration of electricity from point of generation to point of consumption.
• The Accelerator business includes advanced research, consulting services, and financial services.

The J.P. Morgan price target for the shares is $1,330.

Financials: Citigroup

Rising interest rates and a reasonable valuation make this a great stock to own now. It has a 1.74% dividend. Citigroup (NYSE:C) is a global diversified financial services holding company.

The company’s segments include:

• Services
• Markets
• Banking
• Wealth
• U.S. Consumer Cards

The Services segment includes Treasury and Trade Solutions (TTS) and Securities Services. TTS provides an integrated suite of cash management, trade and working capital solutions to multinational corporations, financial institutions and public sector organizations.

The Markets segment provides corporate, institutional and public sector clients with sales and trading services across equities, foreign exchange, rates, spread products and commodities. The Banking segment includes investment banking, which supports client capital-raising needs, while the Wealth segment includes Private Bank, Wealth at Work and Citigold.

The U.S. Consumer Cards segment includes branded cards, co-branded cards, private label cards and installment lending solutions.

The J.P. Morgan price target for the bank is $149.

Value-Oriented Consumer Goods: Walmart

The stock was blasted recently after posting solid results, but it also issued guidance for lower-than-expected U.S. same-store sales growth. Walmart (NYSE:WMT) is a technology-powered omnichannel retailer that pays a 0.83% dividend.

Walmart operates retail and wholesale stores and clubs, as well as e-commerce websites and mobile applications, throughout the United States, Africa, Canada, Central America, Chile, China, India, and Mexico.

It operates in three reportable segments. The Walmart U.S. segment includes the company’s mass merchandising concept in the U.S., as well as eCommerce, which provides omni-channel initiatives and other specific business offerings such as advertising services. The Walmart International segment consists of the company’s operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives. And the Sam’s Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.

J.P. Morgan has a $125 target price.

Healthcare and Pharmaceuticals: Bristol-Myers Squibb

Bristol Myers Squibb (NYSE:BMY) is a global biopharmaceutical company committed to discovering, developing, and delivering innovative medicines for patients with serious diseases across oncology, hematology, immunology, cardiovascular disease, neuroscience, and other therapeutic areas. This top company remains a solid long-term pharmaceutical stock, offering an outstanding entry point with a reliable 3.83% dividend.

Its platforms comprise chemically synthesized or small-molecule drugs, including protein degraders, as well as biologics produced through biological processes. These platforms also encompass ADCs, CAR-T cell therapies, and radiopharmaceutical therapeutics. Small-molecule drugs are typically administered orally as tablets or capsules, although other delivery mechanisms are also used. Biologics are usually administered by injection or intravenous infusion. CAR-T cell therapies are administered by intravenous infusion.

Its growth portfolio includes:

• Opdivo
• Opdivo Qvantig
• Orencia
• Yervoy
• Reblozyl
• Opdualag

Bristol Myers Squibb’s legacy portfolio includes:

• Eliquis
• Revlimid
• Pomalyst/Imnovid
• Sprycel
• Abraxane

J.P. Morgan recently raised its $67 target for the stock to $73.

Industrials: Caterpillar

The giant equipment company has had a banner 2026 and is walloping the S&P 500, up 36.46% year-to-date, while paying a small 0.70% dividend. Caterpillar (NYSE:CAT) manufactures construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Its segments include:

• Construction Industries
• Resource Industries
• Power & Energy

The Construction Industries segment supports customers using machinery in infrastructure and building construction applications. The Resource Industries segment develops and manufactures high-productivity equipment for surface and underground mining operations worldwide, and provides select work tools, machinery components, wear and maintenance components, and related parts. And the Power & Energy segment supports customers in oil and gas, power generation, marine, rail and industrial applications, including Caterpillar machines. It also develops and provides software solutions for the mining industry.

Caterpillar also provides financing and related services through its Financial Products segment.

J.P. Morgan has a $1,165 target price.

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Few large-cap consumer stocks have swung as violently as Target (NYSE:TGT) over the past year. Shares bottomed near $81.20 in late 2025, but a turnaround under CEO Michael Fiddelke, a blowout Q2, and a fresh tariff-refund tailwind have driven the stock up 66.28% year to date. Even after that rally, I still see room to run.

Our 24/7 Wall St. price target for Target is $183.19, implying 12.2% upside over the next 12 months, with a buy rating and high confidence.

24/7 Wall St. Price Target Summary

Target is finally producing the traffic, comp, and margin recovery investors have waited three years for. The multiple still prices in a broken story despite the operational turnaround. Our 24/7 Wall St. price target captures that valuation gap.

A Beaten-Down Retailer Snaps Back

Target has staged one of the sharpest reversals in retail. Shares are up 15.14% over the past month and 66.74% over the past year, now trading essentially at the 52-week high of $161.98.

Q2 delivered: revenue of $26.54 billion grew 5.27%, comps rose 3.8%, traffic climbed 3.6%, and adjusted EPS of $4.11 blew past the $2.3374 consensus. That includes a $1.65 per share benefit from $994 million in IEEPA tariff refunds, but even excluding refunds, underlying EPS grew about 20% year over year. Management raised FY2026 EPS guidance to $9.90 to $10.90.

Why Bulls See a Breakout to $200+

The bull case rests on durability. Digital comps accelerated to 8.7%, same-day delivery grew more than 25%, and non-merchandise revenue (Roundel ads, Target+ marketplace, Target Circle 360) jumped over 20%, with Roundel billings up nearly 20% and Target Plus GMV up more than 40%.

These high-margin, high-multiple businesses hide inside a discount retailer’s P&E. Layer in $8.3B of remaining buyback authorization, resuming repurchases in the back half, and a raised sales outlook, and the bull path to $204.67 aligns with 32 bullish analyst ratings on file.

What Could Go Wrong

The tariff refund flatters the numbers. That $1.65 per share is non-recurring, and management expects only modest additional refunds. Home and apparel remain underperforming, competitive pressure from Walmart and Costco is unrelenting, and capex is up 27% year over year.

Heavy capex funds roughly 130 remodels and 24 new stores this year, investments bulls argue drive the traffic gains now showing in comps. The bear path lands near $150.16, or about 8% downside.

How Target Stacks Up Against Walmart and Costco

Walmart (NYSE:WMT) posted 5.9% revenue growth with adjusted EPS of $0.81, but trades at 40x forward earnings, more than double Target’s 19x.

Costco (NASDAQ:COST) posted 9.8% comparable sales in its most recent quarter, but trades at 42x forward earnings. TGT trades at less than half the peer multiple.

Against that field, our price target looks conservative. TGT needs only a modest re-rating as the turnaround extends.

Why the Setup Still Screens Attractive

My verdict is a buy at $163.34, with a 24/7 Wall St. price target of $183.19 and 90% confidence. The widening valuation gap versus peers combined with reaccelerating traffic tips the scale.

I’d be a buyer here as long as comparable sales stay positive through the holiday quarter. I’d step aside if Q3 traffic rolls over or home and apparel deteriorate further.

Here is where our model projects Target could trade, assuming the current turnaround holds.

These projections assume Target continues executing on its refreshed strategy. Meaningful deviation could come from tariff policy shifts or a sustained recovery in home and apparel.

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Walmart (NYSE:WMT) did the thing shareholders are supposed to want. It beat estimates. It raised full year guidance. And the stock still fell 9% on August 20, 2026, from $114.30 to $103.84. That is the worst earnings day reaction in Walmart’s last ten reported quarters, and the fourth straight earnings day decline.

Beat and Raise That Investors Refused to Buy

The numbers looked good on paper. Adjusted EPS of $0.81, beating the $0.7413 consensus, beating expectations, on revenue of $187.94 billion, up 6% year over year. Management lifted the FY27 outlook: adjusted EPS to $2.80 to $2.87 from $2.75 to $2.85, and constant currency sales growth to 4.0% to 5.0% from 3.5% to 4.5%.

CEO John Furner called it “another good quarter” with steady progress on long term drivers. The market disagreed, loudly.

Why the Margin Beat Was Treated as Borrowed

Here’s the crack under the beat. Gross profit rate improved 96 basis points to 25.4%, with Walmart U.S. gross margin up 158 basis points, powered by tariff refunds. CFO John David Rainey told analysts “Operating income growth included a net benefit of approximately 750 basis points related to tariff refunds received in Q2.”

Then he told everyone where that money is going. “A large portion of the refunds were invested at the end of Q2, so the full quarter impact of these investments is more pronounced in Q3.” Furner added “our intent was to deploy much of that back into price, and that’s what we’re doing.” Walmart U.S. ran more than 11,000 rollbacks during the quarter.

That is why Q3 guidance came in soft: adjusted EPS of $0.62 to $0.64, net sales growth of 3.0% to 3.75% in constant currency, with a Flipkart Big Billion Days timing headwind of over 100 basis points. And while operating income jumped 29%, net income fell 9% year over year, partly on a Symbotic mark and other items.

Buyback Irony and the Target Contrast

The optics get worse. Walmart repurchased 25.7 million shares for $3.0 billion in Q2 at an average price of $117.61, well above today’s $103.84 close. Management bought high, and the market marked it to a lower price the same week.

Target (NYSE:TGT) told the same tariff refund story a day earlier, booking a $994 million pretax IEEPA refund worth $1.65 per share. Target shares rose. Walmart, had no room for a beat that management itself called temporary. If you think the price investments compound into share gains, the selloff is a gift. If you think it is a treadmill, the multiple has further to give. Either way, the raise was real, and so was the message that Q2 borrowed from Q3.

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Pre-Market Stock Futures:

Futures are trading higher after a big risk-off Thursday, as all major indices closed lower.  Higher interest rates and oil did the trick once again as Treasury Secretary Bessent’s effort to curb rising rates by buying the long end of the Treasury market fell flat. When the final bell rang, the small-cap heavy Russell 2000 was bludgeoned to the tune of down 1.36% to close at 2,991, while the legacy Dow Jones Industrials was not far behind, falling 1.31% to end the session at 52,762. Retail giant Walmart (NYSE: WMT), a member of the index, fell almost 10% after posting solid results but a very disappointing forward sales outlook. The tech-heavy Nasdaq finished the day at 26,067, down 1%, while the S&P 500 closed at 7,641, down 0.87%.

Treasury Bonds:

Well, so much for the Treasury Department buying bonds. Mr. Bessent’s gambit looked smart yesterday, but the bond vigilantes didn’t buy it, and sellers returned on Thursday and wiped out most of Wednesday’s gains. When the final bell rang, the 30-year bond finished the day at 5.25%, while the benchmark 10-year note was last seen at a 4.70% yield. 

Oil and Gas:

Once again, as it has been every day this week, the energy complex traded higher, as the song remains the song. The geopolitical mess in the Middle East, compounded by rising rates, continues to drive the two major benchmarks higher. When 4 PM EDT rolled around and the final trades hit the tape, Brent Crude closed at $93.54, up over 2%, while West Texas Intermediate closed at $86.60, up 2.62%. Natural gas, for the first time this week, did not follow the leaders and closed the day at $2.76, down 1.95%. 

Gold:

After a strong week for the precious metals, sellers took advantage of the recent strength in the bullion, and Gold closed Thursday at $4,520, down 1.40%. Silver bucked the trend and closed the session at $68.01, up 1.68%. Gold closed lower after a big Wednesday move in which it traded 4% higher, while analysts cited silver’s use as an industrial metal as a tailwind yesterday, and closed the day at $67.97, up 1.62%

Crypto:

Cryptocurrencies surged higher on Thursday as Bitcoin blew past $72,000. The rally was driven by the U.S. Treasury’s bond buyback announcement, a surge of short liquidations, and rising political support for the crypto-focused Clarity Act. At 8 AM EDT, Bitcoin traded at $76,874, while Ethereum was quoted at $2,374.

24/7 Wall St. reviews dozens of analyst research reports every day to identify fresh investment ideas for investors and traders alike. These daily analyst notes include recommendations on stocks to buy, sell, or avoid, as well as new coverage initiations. Important reminder: No single analyst report should ever be the sole basis for buying or selling a stock.

Here are some of the top Wall Street analyst upgrades, downgrades, and initiations seen on Friday, August 21, 2026.  

Upgrades:

• Equifax (NYSE: EFX) was upgraded to Buy from Neutral at Rothschild & Co Redburn, which raised the price target for the shares to $235 from $214.
• O-I Glass (NYSE: OI) was upgraded to Buy from Neutral at Citigroup, with a $9 target price.
• Portland General Electric Company (NYSE: POR) was upgraded to Overweight from Equal Weight at Wells Fargo, which moved the price target to $58 from $51.
• Taylor Devices (NASDAQ: TAYD) was upgraded to Buy from Hold at Freedom Broker, which bumped the target price to $70 from $67.
• Ternium (NYSE: TX) was raised to Overweight from Equal Weight at Morgan Stanley, which lifted the target price to $65 from $55.

Downgrades:

• Bowman Consulting (NASDAQ: BWMN) was downgraded to Underweight from Neutral at JPMorgan, which nudged the price target up to $43 from $40.
• Limbach Holdings (NYSE: LMB) was cut to Underweight from Neutral at JPMorgan, which lowered the target price to $50 from $60.
• Teradyne (NYSE: TER) was downgraded to Neutral from Outperform at Baird, with a $420 target price.
• Frontline (NYSE: FRO) was cut to Sell from Hold at Danske Bank with a $39.15 target price.
• Weibo (NYSE: WB) was downgraded to Neutral from Buy at Citigroup, with a $7.80 target price.

Initiations:

• Broadcom (NASDAQ: AVGO) was initiated with an Overweight rating at BMO Capital, with a $455 target price.
• Hubbell (NYSE: HUBB) was initiated with an Outperform rating at Baird, which has a $555 target price objective for the stock.
• Marvel Technology (NASDAQ: MRVL) was started with an Outperform rating at BMO Capital, with a $250 price target.
• NVIDIA Corporation (NASDAQ: NVDA) was initiated with an Outperform rating at BMO Capital, with a $340 target price objective for the chip giant.
• Space Exploration Technologies (NASDAQ: SPCX) was started with a Sell rating at DZ Bank, which has a $100 target price.
   

The post Here Are Friday’s Top Wall Street Analyst Research Calls: Broadcom, Equifax, Hubbell, Marvell Technology, NVIDIA, SpaceX, Portland General Electric, Taylor Devices, Teradyne, and More appeared first on 24/7 Wall St..

UBS senior research analyst Michael Lasser used a CNBC appearance Thursday morning to reframe the narrative around Walmart (NYSE:WMT) after the retailer’s fiscal Q2 report landed with a soft same-store sales number. The stock is currently down 10% following the report, trading around $103.08 on Thursday.

Same-store sales grew only 2.6%, roughly one point below estimates, and the forecast was underwhelming. Lasser believes the miss reflects a broadening squeeze on lower-income households while Walmart continues to take market share.

He is sticking with a buy rating, arguing that the same components that drove the stock to record highs still exist today.

Walmart’s Three-Part Bull Case

Lasser laid out the structure of the long thesis on air: “What has driven the stock over the last year and a half to this all-time new level and at a premium valuation is threefold. One, a stable core business where Walmart sells one out of every five grocery dollars in the United States. Two, automation and technology that’s going to make the business much more profitable. And three, rolling in new revenue streams that are very high margin.”

The high-margin flywheel is still spinning at scale. “Its eCommerce grew 24% in the U.S. Its advertising business grew 38% in the U.S. These are very comfortable growth levels that continue to support the bull case on this stock,” Lasser said. Global eCommerce now represents 24% of total net sales, and membership fee revenue grew 17% globally.

Why Dollar Stores Will Benefit from Consumers Under Pressure

Walmart U.S. comps decelerated from +4.1% in Q1 and +4.6% in Q4 FY26 to +2.6% in Q2 FY27. Management again noted that share gains continued across categories and income tiers, led by upper-income households, echoing a pattern that has held for four straight quarters.

Lasser pointed to macro evidence supporting his thesis that lower-income shoppers are driving the shortcomings: “In the last 4 to 8 weeks, we have seen a growing number of data points to suggest the low-income consumer is feeling the collective burden of a variety of pressure points, including these elevated gas prices.”

The national average for regular gasoline sat at $4.05 per gallon on August 17, 2026, up 5.0% over the past month, above the $4 threshold the series flags as painful for household budgets. University of Michigan consumer sentiment printed at 49.5 in June 2026, still below the recessionary threshold of 60.

Lasser expects dollar stores to benefit from weakening consumers: “The other notable point that we’re going to see is very likely that the dollar stores, Dollar General, Dollar Tree, are going to have accelerated their growth from the first to the second quarter. These are all signals that the consumer is changing their behavior to try and deal with what is a more difficult situation for that cohort.”

Walmart’s Next Move Could Pressure Profits

Walmart’s Q2 gross margin rate expanded 96 basis points to 25.4%, largely on tariff refunds. Management plans to reinvest those benefits into customer pricing and experience in the second half, which is expected to pressure Q3 operating income growth to 2.0%-4.0% in constant currency. That sets up the tension Lasser is watching: whether Walmart eventually diverts profit dollars from advertising, marketplace, and membership to defend its stable grocery core.

Walmart raised full-year guidance to constant-currency net sales growth of 4.0%-5.0% and adjusted EPS of $2.80-$2.87. Q2 adjusted EPS came in at $0.81 versus a $0.7413 consensus, on revenue of $187.94 billion.

Key Takeaways

Walmart’s weaker comparable sales appear to reflect growing pressure on lower-income consumers rather than a loss of competitive strength. The company is still taking market share while e-commerce, advertising, and membership revenue grow at double-digit rates.

The key question is whether Walmart can protect those gains without reinvesting so aggressively in prices that its expanding high-margin businesses fail to translate into stronger profits.

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The signal from the country’s biggest retailer just got loud. Walmart (NYSE:WMT) reported Q2 US comparable sales growth of 2.6% versus the 3.5% Wall Street expected, the weakest US sales growth in over six years, and shares are down 8.77% on the session to $104.28. When the everyday-low-price leader tells you the consumer is stretching, retirees living on portfolio income should listen. Two Dividend Kings, Coca-Cola and Procter & Gamble, are built to keep sending checks while shoppers trade down.

What the Walmart Report Actually Signals About the US Consumer

Don’t read the headline miss as a broken business. Walmart’s total revenue was $187.94 billion versus $186.77 billion expected, with adjusted EPS of 81 cents and total revenue up 5.9%. Management actually raised full-year guidance to net sales growth of 4% to 5% (from 3.5% to 4.5%) and adjusted EPS to $2.80 to $2.87 (from $2.75 to $2.85). A material chunk of the US comp miss was structural, not cyclical: a 0.8 percentage point headwind from health and wellness as price caps on certain drugs took effect. On top of that, CFO John David Rainey pointed to just over $2 billion of incremental cost headwinds from higher fuel prices this year, and Walmart is eligible for roughly $2.9 billion in tariff refunds that it plans to plow back into lower shelf prices.

The read for income investors is straightforward. Fuel costs are eating household budgets, price caps are pulling reported comps down, and Walmart is choosing to reinvest windfalls into price rather than let them fall to the bottom line. That is consistent with what University of Michigan is showing: consumer sentiment sits at 49.5 in June 2026, well below the 60 recessionary threshold flagged by the source. Walmart itself only yields 0.83% at these levels, so it isn’t a natural income holding. But its message frames the setup for the two staples heavyweights below.

Coca-Cola: The Buffett-Owned Cash Machine Built for Trade-Down

Coca-Cola (NYSE:KO) trades at with a dividend yield of and a $0.53 quarterly payment, or an annualized forward dividend of $2.12. The company most recently stepped the payout from $0.51 in the 2025 cycle to $0.53 in the 2026 cycle, extending more than six decades of consecutive annual increases.

Dividend safety read. Trailing EPS of $3.33 comfortably covers the $2.08 dividend per share. Coca-Cola threw off approximately $6.9 billion in free cash flow in the first half, up from the prior year, and management raised the full-year 2026 FCF target to roughly $12.4 billion. Net debt leverage is 1.4 times EBITDA, below the company’s own 2 to 2.5 times target range, so the balance sheet has plenty of slack. Return on equity runs at 42%, and operating margin expanded to 34.9% from 34.1% in Q2. Regarding ownership: per Berkshire Hathaway’s 13F as of 6/30/2026, filed 8/14/2026, Berkshire disclosed 400,000,000 KO shares, about 10.9% of its disclosed portfolio and roughly 9.3% of Coca-Cola’s class. That’s a point-in-time filing and is not necessarily the current position.

Bull case for income. KO is designed for exactly the environment Walmart described. When shoppers trade down, they don’t quit soft drinks; they buy the mini cans and multipack entry price points Coca-Cola is deliberately merchandising. Volume grew 5% in Q2, Coca-Cola Zero Sugar volume grew 16%, and Trademark Coca-Cola posted its strongest volume growth in 17 years excluding COVID recovery. Guidance now calls for comparable EPS growth of 9% to 10% for the year. Investors have already noticed: shares are up 30.98% year to date.

The risk. The IRS tax dispute now sitting at the 11th Circuit is a real overhang. Management says it expects to prevail, but a negative decision would force a large cash settlement that could pressure buyback capacity even if the dividend itself is untouchable.

Procter & Gamble: 70 Straight Years of Dividend Hikes and Counting

Procter & Gamble (NYSE:PG) trades at and yields , with a quarterly dividend of $1.0885 and an annualized forward payout of $4.354. Per the Q4 filing, this is P&G’s 70th consecutive year of dividend increases and 136th consecutive year of dividend payments. That is Dividend King status without any asterisks.

Dividend safety read. Fiscal 2026 core EPS came in at $6.89 against dividends per share of $4.259, so coverage is comfortable. Cash generation is the real story: operating cash flow of $19.56 billion and free cash flow of $15.84 billion (+12.74%) for the year, with adjusted free cash flow productivity of 100% for fiscal 2026 and 133% in Q4. Management plans to return $15 billion of cash to shareholders in fiscal 2027, over $10 billion in dividends and approximately $5 billion in share repurchases. Interest coverage is 10.66x and return on equity is 30.3%.

Bull case for income. P&G’s portfolio is exactly the kind of daily-use consumable that resists trade-down. Beauty grew 6% in Q4, and Tide Original Liquid, following a product upgrade at the same price, moved from decline to high single-digit growth. Shares trade at 22 times trailing earnings, roughly in line with a forward multiple of about 21, and are down 6.21% over the past year while KO ran higher. For income buyers rotating out of hot names into defensive cash flow, that relative laggard status is an opportunity for patient income buyers.

The risk. Fiscal 2027 embeds an approximately $1 billion after-tax commodity, energy, and transportation headwind, and management explicitly warned that first-quarter EPS could be down 5% or more versus prior year. Guidance for core EPS growth of 0% to 3% leaves no room for another shock.

Bottom Line for Retirement Income

Walmart’s report is the clearest US consumer-stress signal in years, and the market is repricing exposure to discretionary demand in real time. Coca-Cola and Procter & Gamble sell what stretched households still buy every week, they generate more cash than they need to fund the dividend, and their balance sheets are ready for a slower spending environment. Between KO’s 2.39% yield paired with double-digit EPS growth and PG’s 2.97% yield backed by a 70-year increase streak, retirees get the two things that matter most when the consumer wobbles: a growing check and the balance sheet to keep sending it.

The post Walmart Just Posted Its Weakest US Sales Growth in Six Years: 2 Dividend Kings Built for a Squeezed Consumer appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) stock is down 8% to $105.45 in early Thursday trading after the company posted Q2 FY27 results. At the same time, the SPDR S&P Retail ETF (NYSEARCA:XRT) is down 2% to $87, and the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.5% to $765.32.

Walmart’s peer names are absorbing sympathy pressure without breaking. Target (NYSE:TGT) stock is down less than 1% to $158.40, while Costco (NASDAQ:COST) stock is down 2% to $938.60.

Walmart shares are absorbing several times more selling than the retail ETF and roughly fourteen times more than the broad market fund. That points to a company-specific reaction rather than a sector rotation, which is why XRT holding a modest decline is a meaningful indicator.

Slowest Same-Store Sales Since 2020 Overshadows a Raise

[stock_chart symbol=”WMT”]

Walmart reported Q2 revenue of $187.9 billion, up 6% year over year and above the roughly $186 billion consensus. Adjusted EPS came in at $0.81 versus a $0.74 estimate. Yet the headline that mattered was Walmart U.S. same-store sales, which grew 2.6% against a 3.7% forecast.

That’s the slowest pace at Walmart U.S. since Q4 2020 and down from 4.6% a year earlier, while Sam’s Club comparable sales growth eased to 4.4% from 5.9%. Cheaper drug prices weighed on the print, tied to legislation letting Medicare negotiate prices; excluding health and wellness, core merchandise comps grew 3.4% and global e-commerce sales rose 23%.

Walmart’s forward guidance did the real damage. Q3 outlook calls for net sales growth of 3% to 3.75% in constant currency and adjusted EPS of $0.62 to $0.64, below the $0.68 estimate. CFO John David Rainey attributed part of the shortfall to a timing shift in Flipkart’s Big Billion Days sale between Q3 and Q4, a headwind of more than 100 basis points to Q3 sales growth.

Walmart owns an 81.3% stake in Flipkart. Rainey stated, “For this reason, I encourage you to consider Q2 and Q3 performance together to assess the underlying growth of the business.” Walmart still raised its FY27 outlook to net sales growth of 4% to 5% in constant currency and adjusted EPS of $2.80 to $2.87, though analysts had modeled $2.90.

Furthermore, Walmart flagged that tariff refunds contributing to a gross profit rate of 25.4%, up 96 basis points, would be reinvested into customer pricing in the back half, pressuring operating income growth in Q3. Global inventory ran 6.7% higher, and general merchandise like-for-like inflation was just 1.7%.

Where the Names Diverge

Year to date through Wednesday’s close, Target stock was up 67%, Costco stock was up 11%, XRT was up 5%, and Walmart stock was up 3%. Target’s recovery trade has already priced in, so a soft quarter from Walmart reads differently for TGT than a shared category problem would.

Costco’s membership model, with 148.5 million cardholders and an 89.7% worldwide renewal rate, generates fee income that doesn’t swing on a single quarter of comparable sales at any one peer. That’s the mechanical reason COST stock is easing rather than breaking, and the retail ETF’s small decline confirms the tape is treating today as a Walmart-specific event.

Position Sizing and the Next Catalyst

Walmart carries a market cap of $909.61 billion and a P/E ratio of 42x while U.S. comparable sales grow at 2.6%. That valuation leaves little room for guidance disappointments, and any add-on-weakness position sizing on WMT stock should stay modest because Q3 headline growth is set to slow visibly before Q4 recaptures the Flipkart timing benefit.

The bull case rests on Walmart’s higher-margin engines, with global advertising up 38%, membership fees up 17%, and U.S. marketplace sales up 52% in Q2. A bear read is that a low-40s multiple is priced for those businesses to keep compounding while core comps decelerate.

Traders may want to watch whether Walmart stock holds above $105 through the close. Another catalyst arrives with the Q3 report, when the Flipkart calendar shift will reverse and clarify the underlying trend Rainey pointed to.

The post Walmart Drops 8% on Slowest Same-Store Sales Growth Since 2020; Target Holds Steady, Costco Eases appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) delivered the kind of quarter that should have been an easy win. Revenue rose 5.9% to $187.9 billion, topping Wall Street’s $186.8 billion estimate, and management raised its full-year sales and profit outlook. Yet the stock fell after investors focused on a troubling figure: U.S. comparable sales grew just 2.6%, a rare miss for a retailer that has consistently delivered stronger growth.

The obvious explanation is that consumers are running out of money. Walmart is where shoppers go when budgets tighten, so weaker sales could suggest even value-conscious households are feeling squeezed.

But Target (NYSE:TGT) complicates that argument. Its comparable sales increased 3.8% during the same period, roughly 1.5 times Walmart’s pace, despite Target having greater exposure to discretionary spending.

If inflation were broadly crushing household budgets, Target should have struggled more than Walmart. Instead, something much more Walmart-specific is weighing on its reported sales.

The Real Culprit: Cheaper Prescription Drugs

That something is Walmart’s pharmacy business. Falling prescription drug prices, driven partly by Medicare’s drug-pricing rules and other federal policies, reduced Walmart’s U.S. comparable sales growth by an estimated 80 to 90 basis points. Excluding that impact, comparable sales would have been closer to 3.4% — much nearer to expectations.

The mechanics are simple. Walmart can fill more prescriptions while generating less revenue if the price of each prescription falls. The company specifically pointed to GLP-1 weight-loss and diabetes drugs, noting that prescription volumes continued to rise even as lower prices more than offset the additional volume.

In other words, more customers are walking out of the pharmacy with their medication, but the register is reading a lower total because each script now costs less. That’s not a sign of financial distress; it’s closer to the opposite — customers not being forced to skip or ration medication.

And Walmart isn’t alone. The U.S. is experiencing significant prescription-drug price deflation, meaning retailers with large pharmacy businesses can see reported sales pressured even when underlying demand remains healthy.

Target doesn’t face the same issue because it sold its pharmacy business to CVS Health (NYSE:CVS) for $1.9 billion in 2015. The effects of lower prescription prices therefore show up at CVS rather than Target.

Inflation Still Matters

That doesn’t mean inflation isn’t affecting Walmart. It’s simply having conflicting effects.

On the positive side, elevated prices are encouraging middle- and higher-income shoppers to trade down, helping Walmart gain market share. Grocery sales also remained strong because food is a necessity, while shoppers seeking lower prices are increasingly turning to Walmart’s private-label products.

But there are warning signs. U.S. transaction growth slowed to 1.5% from 3% a quarter earlier, suggesting lower-income consumers are making fewer trips or spending less per visit. Discretionary categories such as electronics, apparel, and toys also remain relatively soft as households prioritize necessities.

Meanwhile, higher fuel and freight costs are adding pressure. Walmart has largely absorbed those costs rather than passing them along to customers, protecting its value proposition but putting pressure on margins.

Key Takeaway

Walmart’s quarter doesn’t support the simple conclusion that American consumers are running out of money. Inflation is creating a more complicated picture: It’s pushing higher-income shoppers toward Walmart while simultaneously limiting spending among lower-income households.

More importantly, the biggest factor behind Walmart’s disappointing comparable-sales number wasn’t necessarily weak consumer demand. It was the decline in prescription prices.

That’s a headwind for reported revenue, but investors shouldn’t confuse it with deteriorating underlying demand. Walmart is selling more prescriptions at lower prices — a very different problem from customers walking away from the checkout counter.

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Costco (NASDAQ:COST) has spent years earning its premium multiple through membership renewals, warehouse expansion, and the Kirkland Signature flywheel. The digital, advertising, and pharmacy stack is scaling rapidly behind the scenes, reshaping the growth model.

Costco trades at $961.35 as of the August 18 close. Our 24/7 Wall St. price target for Costco is $1,030.46, implying 7.19% upside over the next 12 months. Our recommendation is buy, and confidence is high at 90%.

24/7 Wall St. Price Target Summary

A Choppy Year That Sets Up a Cleaner Setup

Costco is up 11.97% year to date but down 1.26% over the past year, trading well off the $1,094.76 52-week high.

Q3 FY2026, reported on May 28, 2026, delivered EPS of $4.93 on revenue of $70.527 billion, meeting expectations on the bottom line while beating revenue estimates.

Comparable sales rose 9.8% (6.6% adjusted), digitally enabled comps jumped 21.5%, and paid membership hit 82.9 million with worldwide renewal steady at 89.7%. The recent 13% dividend increase reinforces management’s confidence in the cash engine.

The Case for $1,130 and Higher

The bull scenario pushes Costco to $1,132.94, a 17.85% total return. Retail media and AI search drive the engine. Personalized recommendation carousels contribute just under half a billion dollars of e-commerce sales, and CEO Ron Baccaras says AI search traffic showed triple-digit growth in Q3 at the highest conversion rate of any traffic source.

Pharmacy comp sales rose mid-20s with GLP-1 tailwinds, and gas station volumes hit all-time company records. Analyst consensus target sits at $1,077.31 with 23 Buy ratings against 2 Sell.

What Could Go Wrong

Our bear case lands at $948.22, a -1.37% return. Valuation is stretched: trailing P/E of 48 and forward P/E of 42 leave little room for comp deceleration. University of Michigan Consumer Sentiment printed 49.5 in June 2026, recessionary territory.

Tariff uncertainty, FX drag, and insider selling warrant caution. Counterpoint: Costco’s 15.19% net income growth outpaces revenue, and free cash flow expanded 18.2% in FY2025. The multiple is high, but earnings are delivering.

How Costco Compares to Walmart and BJ’s

Walmart (NYSE:WMT) is the most direct scale peer, with Sam’s Club and global e-commerce continuing to scale. WMT trades at a meaningful discount to Costco’s 48, a premium justified by faster comp growth.

BJ’s Wholesale Club (NYSE:BJ) posts membership fee income growth closely tracking Costco’s 10.7% membership fee growth, and BJ trades at less than half Costco’s multiple. The peer set makes our 24/7 Wall St. price target reasonable.

The Setup From Here

Our 24/7 Wall St. price target of $1,030.46 supports a buy at 90% confidence. The tipping factor is the underappreciated stack of retail media, AI search, and pharmacy layering on top of a durable membership annuity.

The thesis strengthens if digital comps stay above 20% into Q4. It weakens if renewal rates slip below 89% or comp traffic turns negative. On this data, the risk-reward tilts favorably.

Costco Price Prediction 2026-2030

Extending the model forward using base-case annualized growth of 6.01%, here is where our 24/7 Wall St. price target projects Costco could trade.

These projections assume Costco continues executing on membership, digital, and warehouse expansion. Meaningful upside or downside could come from AI-driven retail media monetization or a sharper consumer-sentiment downturn.

The post Costco Is Quietly Building Its Next Big Growth Engine appeared first on 24/7 Wall St..

CNBC reported that Target delivered its clearest evidence yet that its turnaround is gaining traction. The retailer beat Wall Street’s second-quarter revenue, comparable-sales, and profit expectations while raising its full-year adjusted earnings forecast from $7.50 to $8.50 per share to a new range of $9.90-$10.90.

Target’s (NYSE:TGT) $4.11 in adjusted earnings per share included a $1.65 benefit from nearly $1 billion in tariff refunds. Even without that windfall, however, the underlying business exceeded expectations. Comparable sales increased 3.8%, traffic rose 3.6%, digital sales grew 8.7%, and operating margin excluding the refund reached 5.9%. After two quarters of declining comparable sales, Target appears to have produced a genuine operating inflection.

A $994 Million Tariff Refund Supercharged Earnings

Target booked $994 million pretax in refunds, classified as a reduction of cost of sales, translating to a $752 million after-tax benefit and the $1.65 per share lift. Management explicitly excluded any potential future refunds from the raised guidance range.

Strip that windfall out and Q2 results still cleared the bar. “Second quarter comp store sales were up by 3.8%, and that is above the 2.4% increase that the street had been expecting,” Quick said.

And on profitability: “If you strip out the tariff refund benefit, operating margin was 5.9%. That compares to estimates of 5.6%.” Traffic was up 3.6%, digital comps rose 8.7%, and same-day delivery grew more than 25%. All six core merchandising categories grew year over year, with double-digit growth in Hardlines.

Target Growth Signals a Genuine Turnaround

Management framed the print as continued proof that the strategy is working. In prepared remarks, Target’s CEO said, “Second quarter results build on the encouraging momentum we saw in the first quarter, giving us increasing confidence that our strategy is resonating with our guests,” and noted that “over the past year, we’ve reduced prices on more than 10,000 frequently purchased items.“

Just two quarters ago, Q4 FY2026 comparable sales declined 2.5%, and Q3 FY2026 comps fell 2.7%. Returning to a positive 3.8% comp with accelerating traffic is a meaningful inflection. Capital expenditures ran up 27% year over year as the store count climbed to 2,019, and non-merchandise revenue streams like Roundel, Target Circle 360, and Target+ marketplace continue to grow at a fast rate.

Every Major Merchandise Category Returned to Growth

Jefferies analyst Corey Tarlowe had argued two days earlier that Target offered more upside than Walmart (NYSE:WMT), pointing to a cheaper multiple, a margin trough around 4% versus a historical 6% average, and roughly $2 billion of incremental investment behind an assortment refresh.

Today’s 3.8% comps and 5.9% ex-refund operating margin read directly against that thesis. Walmart, for reference, most recently reported Q1 FY27 revenue of $175.684 billion (+6.08% YoY) with Walmart U.S. comp sales up 4.1%, and the shares are up 15.09% over the past year.

Target’s stock has run harder. “Over the last year, that stock is up by almost 40%. So expectations are incredibly high as you walk into any of these numbers,” Becky Quick observed. The shares had gained 10.05% over the prior month and 60.22% year to date heading into the earnings report.

Key Takeaways

The tariff refund made Target’s headline earnings beat look spectacular, but the company also made organic progress within the core business. Comparable sales returned to growth, store traffic accelerated, digital demand remained strong, and operating margin exceeded expectations even after removing the one-time benefit. Those results suggest Target’s price cuts, merchandise refresh, and investments in stores and fulfillment are beginning to work.

The post Target Just Delivered Its Strongest Evidence Yet That the Turnaround Is Working appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) screens as a low-deliberation candidate for a retirement portfolio heading into the Aug. 20 pre-market earnings release, and the setup is not close. Prediction-market traders are pricing a 75.5% probability of an earnings beat, the operating engine is compounding, and the capital-return machine is at its most aggressive posture in years. This is the kind of business retirees are supposed to own, and the catalyst window is 24 hours away.

The Catalyst Is Already Loaded

Management guided Q2 FY27 to adjusted EPS of 72 cents to 74 cents on 4% to 5% constant-currency sales growth. Q1 FY27 already ran hot, with revenue of $175.68 billion (+6.1% YoY), global eCommerce up 26%, advertising up 37%, and membership fee revenue up 17%. The macro backdrop cooperates: BEA data shows June 2026 food spending at $1.573 trillion versus $1.527 trillion a year earlier, exactly the volume tailwind Walmart converts into share gains.

The Income and Buyback Story

Walmart raised the annual dividend to 99 cents per share from 94 cents and authorized a new $30 billion repurchase program with $28.2 billion remaining. In Q1 alone, the company retired 16.6 million shares for $2.1 billion at an average $125.51. Analysts carry a $137.97 price target against a current quote of $115.33, alongside 28 Buy ratings and nine Strong Buy ratings against a single Sell rating.

The Head-to-Head Isn’t Close

Target (NYSE:TGT) is the obvious alternative, and the comparison favors Walmart decisively. Target has posted three consecutive quarters of year-over-year sales declines while Walmart printed Walmart U.S. comp sales up 4.1% ex-fuel with traffic up 3%. Costco (NASDAQ:COST) is the other name investors reach for, but it trades at a materially richer multiple than WMT’s 40 P/E while Walmart’s dividend yield of 0.82% exceeds Costco’s base yield and is paired with a fresher buyback authorization. Walmart’s 37% advertising growth is a margin lever Costco simply does not have at scale.

Dismissing the One Risk

The bear case points to Q1 FY27 free cash flow of -$1.9 billion on CapEx of $6.68 billion (+34% YoY). That CapEx is funding automation and same-day delivery, the exact spend that produced FY26 free cash flow of $14.92B (+17.88%) and store-fulfilled delivery growth of 45%. It is investment, and it is already paying.

Walmart’s setup into the Aug. 20 earnings release looks compelling for long-term holders.

The post Walmart May Have a Big Surprise in Store For Investors on August 20th appeared first on 24/7 Wall St..

Shares of Target (NYSE:TGT) are up 5% to $159.91 in early Wednesday trading after the retailer posted a sharp Q2 FY2026 earnings beat, banked a large one-time tariff refund, and sharply raised full-year sales and profit guidance. Target stock closed Tuesday at $152.48 and had gained 60% year to date (YTD) through that close.

The rally caps a remarkable run for a name that spent much of the past two years in the penalty box. Target’s merchandising reset, price investments, and traffic recovery are showing up in the results for a second straight quarter, and management leaned into that momentum by lifting the outlook.

Merchandising Reset and Tariff Refund Power a Big Beat

Target’s net sales rose 5.3% year over year (YoY) to $26.54 billion, topping estimates, and diluted earnings per share doubled to $4.11. That figure included a $1.65 per share benefit from tariff refunds. Comparable sales rose 3.8% against a 1.9% decline a year earlier.

Furthermore, Target’s store comps rose 2.7% and digital comps rose 8.7%, driven by more than 25% growth in same-day delivery. Transactions climbed 3.6% and the average ticket ticked up 0.2%. Sales increased in every merchandise department, led by beauty and food.

Additionally, Target’s gross margin came in at 33.7% versus 29% a year ago, boosted by 370 basis points from tariff refunds. Capital spending hit $1.4 billion in the quarter, up 27% YoY on store remodels and new locations.

Target has cut prices on more than 10,000 items over the past year, mostly food, and CEO Michael Fiddelke signaled more cuts are coming.

Guidance Raise: Real Underneath, but the Headline Is Boosted

The retailer now expects full-year sales growth of 5%, up from 4%, and lifted EPS guidance to a range of $9.90 to $10.90 from $7.50 to $8.50. That compares with fiscal 2025 EPS of $7.57. Stripping out tariff refunds, the guidance midpoint reflects a $0.75 increase versus the prior range.

The distinction matters: Target expects a full-year operating margin 6%, including 90 basis points of benefit from the Q2 tariff refunds. Stripping out those refunds, the rate is projected about 50 basis points higher than last year’s adjusted 4.6%. The underlying improvement is real, just more modest than the headline suggests.

Fiddelke stated that Q2 results “build on the encouraging momentum we saw in the first quarter.” He added, “We’re encouraged,” while cautioning, “There’s a lot of work still in front of us, and the goal isn’t a couple strong quarters. The goal is years of sustained top-line growth.”

Peers Lag as Target Extends Its YTD Lead

For comparison, Walmart (NYSE:WMT) shares are trading at $114.68, up 4% YTD through Tuesday’s close, a fraction of Target’s YTD gain. Costco Wholesale (NASDAQ:COST) stock sits at $959.87, up 12% YTD, still leading the group on membership economics and traffic.

Kroger (NYSE:KR) shares trade at $56.44, down 8% YTD as grocery margin pressure lingers. Lowe’s Companies (NYSE:LOW) stock is at $217, down 9% YTD, weighed by softer DIY discretionary spending.

Jefferies analyst Corey Tarlowe described Target’s overhaul (expanded wellness, 3,000 added beauty products across 60 new brands, a reset of 75% of home decorative accessories, and a back-to-school assortment that is more than 50% new) as one of the broadest assortment refreshes in years, and said the market may be underestimating how durable the traffic benefits will be.

The Retail ETF Tells a Different Story

The SPDR S&P Retail ETF (NYSEARCA:XRT) is trading at $87.81, up 3% YTD. The fund is a broad, equal-weighted basket in which any single retailer is a small weight, which is why Target’s outsized Q2 rally barely moves the ETF’s tape. Its equal-weight design also means smaller specialty names influence performance as much as big-box giants.

Investors leaning on XRT for retail exposure should keep in mind its concentration in one narrow consumer segment. That can amplify swings tied to tariffs, consumer confidence, and holiday demand, in either direction.

What to Watch

Traders could look for signs that Target stock holds its early gains through the close and that follow-on analyst notes lift price targets to reflect the sharply raised outlook. The Q3 FY2026 back-to-school read-through and any signal on additional tariff refunds are the next catalysts on deck.

If comparable sales momentum persists without another tariff windfall, the bull case for Target strengthens materially. Otherwise, expect the market to refocus on the $0.75 underlying midpoint bump rather than the eye-catching headline EPS range.

The post Target Rises 5% on Q2 Beat, Tariff Refund Windfall, and Sharply Raised Full-Year Outlook appeared first on 24/7 Wall St..

Walmart (NASDAQ:WMT) has cooled after a strong spring run. The question is whether the stock can push back through the $140 level it touched earlier this year. Our proprietary model says patience will be rewarded, though the path likely stays choppy.

The 24/7 Wall St. price target for Walmart is $130.14 over the next 12 months, implying 13.83% upside from the current $114.33 quote. We rate the stock a buy with 90% confidence.

24/7 Wall St. Price Target Summary

The Pullback From May Highs

Walmart peaked around $131.45 in mid-May 2026 before drifting to $112.53 by mid-July. Shares have since firmed, gaining 1.48% over the past week and 15.02% over the past year. The 52-week range sits at $94.85 to $135.16.

The catalyst was Q1 FY27, released May 21. Adjusted EPS of $0.66 narrowly beat, and revenue of $175.68 billion grew 6.08%, but shares dropped 7.27% as fuel costs absorbed roughly $175 million of operating income and free cash flow swung to negative $1.9 billion on elevated capex.

The Case for $140 and Beyond

Our bull scenario projects Walmart at $146.09 in one year, with the stock touching $140.60 by June 18, 2027. The engine is the high-margin flywheel: global advertising grew 37%, marketplace sales climbed nearly 50%, and membership fees rose over 17%. Advertising and membership now represent roughly one-third of operating income.

CFO John David Rainey told analysts he is “probably as excited about the potential of our business today as at any point in time in the last few years.” The analyst consensus price target sits at $137.97, with 28 Buy and 9 Strong Buy ratings backing the setup.

What Could Go Wrong

Our bear case tags WMT at $116.71 in a year, essentially flat. The valuation sits at a premium: trailing P/E of 41 is elevated for a business with a 3.07% net margin. Fuel costs, IEEPA tariff uncertainty, and a roughly 700 basis point headwind in Health & Wellness from Maximum Fair Pricing pressure operating income. Inventory rose 8.9%, and ROI slipped 40 basis points to 14.9%.

Bulls counter that negative free cash flow reflects deliberate capex of approximately 3.5% of net sales to automate fulfillment, and fuel headwinds are exogenous, tied to commodity swings rather than the operating model.

How Walmart Compares to Costco and Target

Costco Wholesale (NASDAQ:COST) offers the cleanest valuation contrast. Costco trades at trailing P/E of 48 and forward P/E of 42, both premiums to Walmart, on quarterly revenue growth of 21.5%. If the market pays 48 times earnings for Costco’s membership model, our 41 times multiple on Walmart looks reasonable.

Target (NYSE:TGT) sits on the other end. FY26 revenue fell 1.68% to $104.78 billion, and full-year adjusted EPS of $7.57 declined year-over-year. That share loss is Walmart’s gain, especially the strongest general merchandise share growth in five years. The peer group makes our $130.14 target look conservative.

Walmart Price Prediction 2026 to 2030

The 24/7 Wall St. price target of $130.14, our buy rating, and 90% confidence reflect a durable share-gain story trading below its rightful multiple after a fuel-driven earnings dip.

The thesis rests on advertising, membership, and marketplace growth compounding faster than core retail. The main risks are tariff and Maximum Fair Pricing pressure extending through FY28. The setup favors patient buyers.

Extending the model using the base-case 9.04% annualized return path through 2031:

These projections assume Walmart continues executing on omnichannel, advertising, and membership. Significant upside or downside could result from tariff resolution or a sharper consumer slowdown.

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Target’s  (NYSE: TGT) long-term prospects differ sharply from those of other large American retailers. Its stock is down 40% over the last five years. The S&P 500 is 75% higher over the same period. Walmart’s (NYSE: WMT) is up 128%. Costco’s (NASDAQ: COST) is 109% higher.

Investors have never gotten over the fact that, based on revenue, it is so much smaller than the other two. Last year, Walmart had revenue of $576 billion. Costco’s was $199 billion. Target’s was $104 billion. Target’s revenue dropped 2% for the period. Walmart’s rose approximately 5%. Costco’s was up 8% for its most recent fiscal year.

Target says it is recovering. Short-term, that is true. Revenue rose almost 7% in the most recent quarter to $22.4 billion. However, EPS dropped 24% to $1.71. Why isn’t one following the other higher? “Selling, general and administrative expenses.”

Investors were also concerned when the company made veteran Michael Fiddelke CEO. Former CEO Brian Cornell was made Executive Chair. Cornell has been blamed for most of Target’s problems over the last several years. Fiddelke must prove that the management change was a wise decision.

Target has begun to claw back some of its long-term stock-price losses. It is up 58% this year. If it posts another relatively good quarter, it has a chance to dig itself further out of the 40% hole.

The post Target’s Stock Down 40% In Five Years appeared first on 24/7 Wall St..

Jefferies equity analyst Corey Tarlowe told CNBC on Monday, August 17, that Target (NYSE:TGT) still offers more upside than Walmart (NASDAQ:WMT), even after Target’s 47% run in the past year. Both companies report earnings this week, with Target reporting before the market opens on August 19, while Walmart reports before the market opens on August 20.

Walmart carries a $917 billion market cap versus Target’s $70 billion, and Walmart trades at 38x forward P/E while Target trades at 17x. Lead equity analyst Corey Tarlowe’s bull case for Target today rests on three key pillars:

1. A reasonable valuation multiple despite the rally
2. A new management team executing on merchandising
3. Margins sitting at a cyclical low

The Bull Case for Target

Tarlowe walked through the differences in what Walmart and Target sell: “Walmart is two-thirds food. Target’s about 50% what they call need-based, but only 25% is actually food and beverage,” he said. Target’s skew towards discretionary products has hurt Target in previous cycles, but now it could serve as a source of operating leverage on increased sales.

On product, Tarlowe pointed to Target’s refresh under CEO Michael Fiddelke: “50% of their assortment is going to be new this year. For back to school, they’ve added 1,500 new beauty items. They’ve added 3,000 new food and beverage items. This type of newness is actually translating into traffic.“

Jefferies’ preview flagged Target traffic up almost 4%, which lines up with Target’s own reported Q1 FY26 comp of +5.6% with traffic +4.4% disclosed in its Q1 earnings report, which also showed revenue of $25.44 billion, adjusted EPS of $1.71, and digital comp sales up 8.9%.

Target’s Margins Are at “Trough” Levels and Have Room to Improve

Tarlowe was blunt about the limits of Target’s competitive positioning: “They’re not going to beat Walmart on price. Nobody beats Walmart on price. But you have to be different, and you have to be unique, and you have to be new. And for Target, that’s working.”

The business could see substantial operating leverage from recent investments: “This year specifically, they’ve actually called out up to $2 billion of incremental investment… they’re in a penny-profit business. Their margins are razor thin today. They’re about 4%, which is on trough. And you’re putting a 20-times multiple on trough margins. We like to buy stocks when companies are at trough margins. Historically they’ve averaged close to 6%,“ Tarlowe said.

Walmart’s Bull Case

Tarlowe sees upside in Walmart too. “Despite Target’s substantial run, we actually think that there’s more opportunity. We think there’s more opportunity at both. But I’m highlighting Target specifically in light of the cheaper valuation and the ability for change, because you have new management and you have new product, you have new processes that they’re implementing,” he said.

Walmart’s flywheel continues to deliver. In Q1 FY27, the company posted revenue of $175.68 billion with U.S. comp sales up 4.1% ex-fuel, and it reiterated its FY27 outlook for adjusted EPS of $2.75 to $2.85.

What to Watch This Week

Tarlowe framed the consumer backdrop driving the traffic. “Traffic is up at a lot of the value-oriented retailers like Walmart, like Target. We published our preview last week, and we highlighted traffic growth at Target up almost 4%,” he said, noting fuel prices back above $4 per gallon nationally as a real pressure point on discretionary spend.

Walmart remains the dominant retailer, with unmatched pricing power and a growing advertising and marketplace business supporting its premium valuation. Target, however, offers the more dramatic turnaround opportunity. A refreshed assortment is already improving traffic, new management is changing how the company operates, and margins have room to recover from roughly 4% toward their historical 6% level.

This week’s earnings should reveal whether that recovery is strong enough to justify another leg higher after Target’s 47% rally in the past year.

The post Top Retail Analyst: Target Offers More Upside Than Walmart Today Ahead of Earnings This Week appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) has quietly become one of the most interesting large-cap growth stories in retail, with a digital flywheel that increasingly resembles a diversified commerce platform rather than a traditional big-box operator. After a pullback from winter highs, the risk/reward has tilted back in shareholders’ favor heading into the back half of the year.

Our 24/7 Wall St. price target for Walmart is $128.33, implying 11.75% upside from the current price of $114.84. Our recommendation is buy at a 90% confidence level.

24/7 Wall St. Price Target Summary

The Digital Flywheel Is Doing the Heavy Lifting

Walmart shares are up 2.07% year to date and 9.89% over the past year, trading roughly 2% below the 52-week high of $135.16 and well off the $94.85 low.

The Q1 FY27 report delivered $175.68 billion in revenue, up 6.1%, with adjusted EPS of $0.66. The standout: global e-commerce sales grew 26% and now represent 23% of net sales, while Walmart Connect advertising rose 44% ex-VIZIO and marketplace sales jumped 50%, the best result in ten quarters.

On the Q2 call, CFO John David Rainey put it plainly: “50% of our incremental profit, excluding claims, was related to advertising, membership, and marketplace.” That is the whole thesis in one sentence.

Why Bulls See a Breakout Ahead

The bull case rests on the “two P&L” framework CEO Doug McMillon has highlighted: the traditional store business plus a higher-margin digital layer built on marketplace, advertising, and membership.

TD Cowen carries a $150 price target, arguing the multiple reset offers a favorable entry point. Mizuho sits at $130. The Street consensus is $137.97. If holiday execution matches management’s confidence and Walmart Connect compounds at 40%+, our bull case scenario points to $125.49 by year-end.

What Could Go Wrong

Walmart trades at a forward P/E of 38, expensive by historical measure for a business with a 3.07% net margin. Tariff pass-through is hitting inventory costs weekly, and Walmart is absorbing meaningfully. Q1 FCF was negative $1.95 billion on $6.68 billion of capex.

Insider activity is currently net selling. Counterfactual: much of that capex funds automation and fulfillment capacity underpinning the same e-commerce growth bulls are paying for. Under a bear scenario, our model projects $115.83 by December.

How Walmart Compares to Costco and Kroger

Costco (NASDAQ:COST) is the obvious membership-model peer. Costco carries a richer forward P/E of 42 and posted 45.5% quarterly earnings growth against 21.5% revenue growth. That premium makes Walmart’s 38 forward multiple look reasonable, particularly given Walmart’s advertising and marketplace optionality Costco lacks.

Kroger (NYSE:KR) is the domestic grocery counterpoint. Kroger’s e-commerce grew 19% last quarter was healthy but visibly slower than Walmart’s 26%. Kroger trades at a mid-teens forward multiple, framing Walmart as the growth-premium name in defensive retail, which supports our target.

I’d Buy It Here

The 24/7 Wall St. price target of $128.33 reflects a business whose earnings mix is quietly improving even as the top line grows mid-single digits.

I would be a buyer if Q2 confirms e-commerce growth holding above 25% and advertising above 40%. I would step aside if tariff pass-through starts compressing US operating margins in the back half. On balance, this is a buy.

These projections assume Walmart continues executing on digital, advertising, and membership. Significant upside or downside could come from tariff resolution and the pace at which Sparky and agentic commerce scale.

The post Walmart’s E-Commerce Engine Roars, Here’s Where It’ll End The Year appeared first on 24/7 Wall St..

I hit the buy button on Amazon (NASDAQ:AMZN) again this week, and I will hit it again next month. The market is busy debating whether $220 billion in 2026 capex is reckless or visionary. I am busy owning more of a company that, in my view, functions less like a discretionary retailer and more like a bundle of high-margin infrastructure utilities I get to compound inside one ticker.

That framing is the whole thesis. Cloud compute, a logistics backbone, and a digital point-of-sale ad network are three separate toll roads. Each one prints cash. I keep buying because the market keeps pricing this like a retailer while the internals keep behaving like a utility conglomerate.

The Receipts Behind the Conviction

Start with AWS. Q2 revenue landed at $42.232 billion, growing 37% year-over-year, which Andy Jassy called “our fastest growth in 18 quarters back when AWS was less than half its current revenue size.” Operating margin came in at 39.4%. The backlog sits at $496 billion. That is contracted demand looking for concrete.

Second, advertising. $19.809 billion in a single quarter, up 26%, sitting on top of the highest-intent shopping surface on the internet. This is checkout-adjacent ad inventory with software margins bolted onto a retail flywheel.

Third, operating leverage. Consolidated revenue grew 19.62% while operating income grew 43.24%. Comparable EPS came in at $1.88 against a $1.83 estimate. Interest coverage sits at 35.17x with net debt to EBITDA of 0.45. The balance sheet can fund the ambition.

Why Not the Obvious Alternatives

A retirement-focused reader will ask why I do not send this money to Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), or Walmart (NYSE:WMT). Fair question. I own two of those already. What Amazon offers that they do not is this exact combination inside one share: AWS growth accelerating for the fifth straight quarter to a $169 billion run rate, a $496 billion backlog, an ad business compounding at 26%, and a retail engine where 40% more items were delivered same-day or overnight in the first half. Walmart is a fine grocer. It does not carry a cloud with a 39.4% operating margin. Alphabet and Microsoft compete on cloud, but I am not being asked to pay a premium multiple here. AMZN trades at a trailing P/E of 22 with a forward multiple of 24.

The Risk I Cannot Wave Away

Free cash flow. Trailing twelve-month FCF turned negative at -$7.6 billion because capex hit $54.208 billion in a single quarter, up 68.44%. That is real. If AI demand cools, this spend leaves scars. What keeps me buying is Jassy’s own framing of the payback math: “For servers and networking equipment, on average, it takes a little less than three years to break even on that investment,” against server lives of five to six years and data centers with 30-plus-year useful lives. Contracted AI capacity for at least five-year terms backs the spend. The bet has counterparties.

The Forward Conviction

Consumer sentiment sits at 49.5, in the pessimistic zone. That is exactly when I want to own infrastructure the economy has to keep renting. Since the July 30 filing the stock is up 13.49% to $267.28, and I have kept adding through it. The market can digest. I plan to compound.

The post Loading Up on Amazon: The Market Digests, I Invest appeared first on 24/7 Wall St..

This article will be updated throughout the day, so check back often for more daily updates. 

The markets were little changed in early morning trading, with a slightly positive bias, as traders worked through a softer oil tape, fresh inflation data and a choppier batch of tech earnings. Earnings kept the Nasdaq in check. Cisco Systems (Nasdaq: CSCO) fell about 7% before the open after results failed to clear investor expectations, while Cerebras (Nasdaq: CBRS) dropped 15% and Coherent (NYSE: COHR) slid 6% following overnight updates.

The macro backdrop was more supportive. Oil prices moved lower, and July PPI came in cooler than expected, giving traders another inflation signal to weigh against earnings that are starting to separate the winners from the laggards. Inflation gave markets a cleaner wholesale-price read, with July PPI flat month over month versus expectations for a 0.2% rise. On an annual basis, producer prices cooled to 4.7% from 5.5%, while core PPI rose 0.2% monthly and matched forecasts at 4.2% year over year.

On the labor market side, initial jobless claims rose to 209,000, above expectations for 202,000, while continuing claims eased to 1.777 million. Taken together, the numbers give traders a familiar Goldilocks setup for SPY and QQQ: inflation pressure is easing, but the labor market is not cracking hard enough to trigger recession alarm.

Here’s a look at where things stand as of pre-morning trading:

Dow Futures: 54,027 Up 0.29%
Nasdaq 100 Futures: 29,907 Up 0.18%
S&P Futures: 7,790 Up 0.26%

Market Movers

CXMT made a blockbuster public-market debut in China, overtaking Tencent as the country’s most valuable listed company with a market cap of roughly $524 billion, according to Bloomberg. The move puts China’s memory-chip ambitions directly on the market’s front page.

Cisco Systems (Nasdaq: CSCO) fell 6.1% to $116.30 even after beating estimates, with adjusted EPS of $1.22 versus $1.17 expected and revenue of $17.25 billion versus $16.82 billion. The selloff looked company-specific, with investors taking profits after a strong run and focusing on elevated expectations and possible AI-hardware margin pressure.

Walmart (NYSE: WMT) revealed it will be reporting its quarterly earnings on August 20th.

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Three well-known dividend payers have confirmed ex-dividend dates landing in the next several trading sessions, which means the window to buy shares and capture the upcoming payments is measured in days, not weeks. To collect the cash, an investor has to be on the books before the ex-date arrives. Once it passes, that specific payment goes to the prior holder.

Quick mechanic: the ex-dividend date is the cutoff. You must own shares before that date to receive the payment. The pay date is when the cash actually hits the account, typically a few weeks later.

Microsoft (MSFT)

Microsoft (NASDAQ:MSFT) is a modest yielder at roughly $3.64 per share annualized, but the upcoming payment is confirmed and imminent. The next quarterly dividend of $0.91 per share carries an ex-dividend date of August 20, 2026, with a payment date of September 10, 2026. The last day to buy and still qualify is August 19, 2026.

Coverage here is rock solid. Microsoft posted FY26 diluted EPS of $17.28 against an annualized dividend of $3.64, and free cash flow of $66.99 billion more than covers the payout. Microsoft raised the quarterly rate from $0.83 to $0.91 starting with the February 2026 payment, extending a multi-year streak of increases. The stock closed at $503.17, up 31.41% over the past month on strong post-earnings momentum. Yield is small, but the dividend is arguably the safest on this list.

Amgen (AMGN)

Amgen (NASDAQ:AMGN) is the heavy hitter on absolute payout. The next quarterly dividend of $2.52 per share has a confirmed ex-dividend date of August 21, 2026, with payment scheduled for September 11, 2026. The buy-by deadline is August 20, 2026. Forward annualized dividend sits at $10.08 per share, materially higher than the S&P 500 average.

Coverage against earnings is comfortable but tighter than Microsoft’s. FY2026 non-GAAP EPS guidance runs $21.70 to $23.10, and the $10.08 annual dividend fits inside that range with room for reinvestment and debt paydown. Amgen lifted the quarterly rate from $2.38 to $2.52 in early 2026, a continuation of a multi-year growth pattern. Shares have run to $414.46, up 49.09% over the past year, so the current yield is compressed from where it stood at the start of 2026, but the dividend itself is well underwritten by pipeline cash flow.

Marriott International (MAR)

Marriott International (NASDAQ:MAR) rounds out the group. The next quarterly dividend of $0.73 per share carries an ex-dividend date of August 20, 2026, with payment set for September 30, 2026. Investors have to be holders by market close on August 19, 2026. Annualized forward dividend runs $2.92 per share, and management lifted the rate from $0.67 to $0.73 beginning with the Q2 2026 payment.

Coverage is the least strained of the three. FY26 adjusted diluted EPS guidance of $11.64 to $11.81 dwarfs the $2.92 annualized payout, and Marriott has flagged plans to return over $4.5 billion to shareholders in FY26 through dividends and buybacks combined. Shares at $348.87 have pulled back 7.36% over the past month, which nudges the yield modestly higher for anyone buying before the cutoff. This is a cyclical hospitality name, so travel demand is the swing factor, but current cash flow more than clears the dividend hurdle.

The Bottom Line on the Deadline

Chasing a single ex-date is a tactic rather than a long-term strategy. A $0.91 payment or a $2.52 payment does not change the long-run case for any of these names. But if you already like the fundamentals, the mechanics matter: miss the ex-date and you miss that specific check. For MSFT and MAR, the last day to buy is August 19, 2026. For AMGN, it is August 20, 2026. Verify with your broker before you execute, and remember that the stock typically opens lower by roughly the dividend amount on the ex-date itself.

The post Dividend Stocks That Are Paying Investors Cash appeared first on 24/7 Wall St..

My 24/7 Wall St. price target for Costco (NASDAQ:COST) lands at $1,022.62, a modest step up from today’s $952.75. The model rates COST a buy with 90% confidence, but upside is narrow. Costco executes at an elite level, and the market already knows it.

24/7 Wall St. Price Target Summary

A Flat Year Hiding a Strong Business

Costco shows stellar fundamentals meeting stalled price action. The stock is up 10.97% year to date but down 2.31% over the last year, trading about 2% below its 52-week high of $1,094.76 and well off the $840.35 low.

Fiscal Q3 2026, reported May 28, 2026, delivered EPS of $4.93 on revenue of $70.527 billion, up 11.58% year over year, with net income rising 15.19%. Comparable sales grew 9.8%, digital comps jumped 21.5%, and the worldwide membership renewal rate held at 89.7%.

The Case for $1,129 and Higher

Bulls have real ammunition. Our bull scenario points to $1,129.73, or an 18.58% total return. Membership fee income compounds at a 10.7% to 14.0% pace, executive membership penetration has climbed to 75% of sales, and e-commerce traffic surged 37% last quarter.

Warehouse count targets 940 by fiscal year-end. The Street’s consensus target of $1,077.31, backed by 4 Strong Buy and 19 Buy ratings, reflects that conviction.

What Could Go Wrong

The bear case takes COST to $942.73, a 1.05% loss. At a trailing P/E of 48 and a PEG of 5, valuation leaves no margin for a soft quarter. Tariff pressure, FX volatility, and rising wages remain live risks flagged in the 10-Q. Insider activity has skewed to selling.

Heavy capex on warehouses and distribution suppresses near-term free cash flow, though Costco’s 29.1% return on equity argues reinvestment earns its keep.

How Costco Compares to Walmart and BJ’s

Walmart (NYSE:WMT) is the direct scale comp. WMT trades at a P/E of 41 with a market cap of $896.56 billion, growing revenue at 6.1% in Q1 FY2027. Costco trades at a P/E of 48 while growing revenue nearly twice as fast, supporting the premium.

BJ’s Wholesale Club (NYSE:BJ) is the closest membership-model peer. BJ posted 9.86% revenue growth in Q1 FY2027 with a 90% tenured member renewal rate, on a market cap of $12.28 billion. The membership economics validate Costco’s model, but BJ’s smaller footprint underscores why COST commands scarcity value.

Quality Compounder at a Full Price

The 24/7 Wall St. price target of $1,022.62 is a buy with 90% confidence, but 7.33% upside is modest. Membership fee income and renewal rates form retail’s closest subscription moat.

The 200-day moving average sits near $958.09, a level worth watching. Key signals to monitor include comp sales growth holding above 5% and continued margin expansion.

Extending the model assumes current comp-sales momentum and membership economics persist.

These assume roughly 30 warehouses annually and renewal rates near 90%. Digital penetration gains offer upside, while tariff shocks or membership fatigue could compress multiples toward the bear-case $1,066.95 five-year outcome.

The post Costco’s Stock Has a Problem: It’s Almost Too Good appeared first on 24/7 Wall St..

Mid-year 2026 has been exhausting. Tech multiples have whipsawed on every AI CapEx headline, tariff chatter keeps macro desks on edge and the average investor is tired of getting head-faked. The antidote is unglamorous: The kind of business that sells diapers, cola and groceries to roughly everyone on Earth, raises its dividend every year for half a century and keeps showing up on the buy list because the math keeps working.

The setup matters. U.S. personal consumption expenditures hit $21,979.4 billion in April 2026, with food spending rising to $1,562.8 billion from $1,519.5 billion a year earlier. Defensive staples revenue is anchored to a spending stream that simply does not turn off. Three names stand out for August.

Walmart (WMT)

Walmart (NYSE:WMT) is the rare mega-cap retailer that is still gaining share and still raising the payout. But the stock has pulled back as of late.  From their year-to-date high in mid-May, shares of WMT are down nearly 16%. But the company continues to grow, evidenced by Walmart U.S.’s comp sales rising 4% ex-fuel in Q1, which management called the strongest general merchandise share gains in five years.

The capital return story is just as steady. The board authorized a $30 billion buyback in February 2026 and raised the FY27 annual dividend to $0.99 from $0.94, extending a streak that places Walmart firmly in Dividend King territory. Shares trade near $112.

The risk: a trailing P/E of 41 and forward P/E of 40 leave little room for execution slips. Free cash flow turned negative $1.9 billion in Q1 on elevated capex, and FY27 guidance assumes no IEEPA tariff refunds. This is a quality-at-a-price story, not a bargain.

Coca-Cola (KO)

Coca-Cola (NYSE:KO) is the textbook quiet compounder. Q2 2026 EPS came in at 93 cents, beating estimates by 3 cents, while revenue of $13.37 billion grew 6.2% YoY after growing 12% YoY in Q1. Management raised FY 2026 comparable EPS growth guidance to 8% to 9% against the $3 base from 2025.

This is now Coca-Cola’s 64thconsecutive year of dividend increases. The quarterly payout stepped up to 53 cents in 2026 from 51 cents in 2025, with the next ex-dividend date being Sept. 15. Yield sits at 2.44%, the stock is up nearly 26% year to date and Reddit’s r/dividendinvesting community has held a bullish sentiment score in the 70–72 range across the past month, a small but telling signal that the long-term holders are not flinching.

The risk: Asia Pacific comparable currency-neutral operating income fell 17% on higher costs, the pending sale of Coca-Cola Beverages Africa is a ~4% headwind subject to regulatory approval, and BODYARMOR absorbed a $960 million impairment in Q4 2025. A forward P/E of 24 is full but defensible given the margin trajectory.

Procter & Gamble (PG)

Procter & Gamble (NYSE:PG) is the boring-but-brilliant archetype. Q3 FY26, reported April 24, 2026, posted core EPS of $1.59 on net sales of $21.24 billion, up 7%, the company’s fourth consecutive quarterly beat. Organic sales rose 3% with growth in all five segments and all regions, led by Beauty at 7% organic.

The dividend record is the headline: 70 consecutive annual increases and 136 straight years of dividend payments since 1890. The quarterly payout sits at $1.0568 per share, with management on pace to return roughly $10 billion in dividends and $5 billion in buybacks in FY26. The stock is up 7% year to date and 4% over the past month, with a beta of 0.385 that confirms the defensive label.

The risk: Tariff costs are expected to hit $400 million after-tax in FY26, core gross margin compressed 100 basis points, and management now expects EPS toward the lower end of the $6.83-$7.09 range. Volume softness in Grooming and Health Care bears watching.

What to Watch Next

The thesis is simple. Consumer staples revenue is tethered to spending that grew every month over the past year, dividends compound regardless of the macro narrative, and three of the longest payout-growth streaks in U.S. equities sit in this group. For investors who spent the first half of 2026 chasing AI headlines, August is a reasonable moment to look at what compounding looks like when nothing exciting is happening. Look at Walmart’s recent earnings report, Coca-Cola’s organic growth cadence and any update from P&G on the tariff offset playbook.

The post 3 Boring but Brilliant Stocks to Buy in August appeared first on 24/7 Wall St..

Walmart (NASDAQ:WMT) trades at $111.74 as I write this, and our proprietary model sees healthy runway from here. Our 24/7 Wall St. Price Target for Walmart is $131.04 over the next 12 months, implying 17.27% upside from current levels. I rate the stock a BUY with a confidence level of 90%. The setup: durable comp momentum, a scaling advertising business and a defensive sector profile when consumer sentiment is fragile.

24/7 Wall St. Price Target Summary

What the Recent Pullback Is Telling Us

Shares of WMT are down nearly 17% from their YTD high on May 19. Admittedly, Walmart has cooled off, but that gives investors a more attractive entry. The stock is now down 0.9% YTD, but still higher by 8.37% over the past year.

The May 21, 2026 Q1 FY27 report showed revenue of $175.684 billion (up 6.08% year over year) and adjusted EPS of 66 cents, beating consensus. Global eCommerce grew 26%, advertising surged 37%, and Walmart U.S. comp sales rose 4.1% ex-fuel. Shares sold off 7.27% that day, a reaction more about expectations than execution.

How We Calculated $131.04

Our model started with a trailing P/E-based price of $113.01 and a forward P/E-based price of $112.75, then applied a 30% weight to the analyst consensus target of $138.59, arriving at a pre-adjustment weighted price of $120.55. Our 247Factor adjustment of 1.087 lifted the target, reflecting 86% bullish analyst sentiment, 19.4% earnings growth, a low beta of 0.603, and moderate retail sentiment.

The Case for $146 and Higher

Our bull case points to $146.22, or 29.38% upside. High-margin businesses drive the path: global advertising grows at a 37% clip, marketplace sales climbed nearly 50% in Q1 (best in 10 quarters), and membership fee revenue rose 17.4%. Retail sales hit $763.7 billion in May 2026, a 12-month high, while share gains among upper-income households broaden the customer mix. A fresh $30 billion repurchase authorization provides operating leverage and shareholder-return firepower.

What Could Go Wrong

Bears point to a rich valuation at a P/E of 39 and forward P/E of 38, well above retail peers. Consumer sentiment sits at just 44.8, deep in recessionary territory. Q1 free cash flow was negative $1.9 billion on elevated CapEx, inventory grew 8.9%, and Maximum Fair Pricing legislation created a 700 bps headwind in Health & Wellness. Our bear case lands at $116.96. Counterpoint: the FCF drag funds automation where about 50% of eCommerce fulfillment is already automated, which should compound margins.

How Walmart Compares to Costco and Amazon

Costco (NASDAQ:COST) trades at an even richer multiple than Walmart, framing WMT’s ~39x P/E as expensive but not extreme within premium defensive retail. Costco’s membership economics validate the market’s willingness to pay up for recurring-revenue retail models, exactly the flywheel Walmart is building through Walmart+ and Sam’s Club.

Amazon (NASDAQ:AMZN) is the eCommerce and advertising benchmark. Walmart’s 26% global eCommerce growth now outpaces Amazon’s retail segment, and Walmart Connect’s 44% ex-VIZIO growth suggests real share is being taken in retail media. Our 24/7 Wall St. Price Target looks reasonable, arguably conservative given the ad segment’s trajectory.

Why the Setup Looks Attractive

The 24/7 Wall St. Price Target of $131.04, a BUY rating and 90% confidence reflect a rare combination: defensive earnings, digital growth and a stock down more than 13% over the past six months. The bullish path holds if advertising and membership continue scaling as they have. The cautious path takes hold if consumer sentiment at 44.8 foreshadows a broader spending contraction that even Walmart cannot outrun.

Walmart Price Prediction 2026–2030

These projections assume Walmart continues executing on automation, advertising, and international expansion. Significant upside could come from a PhonePe IPO or accelerated ad monetization, while tariff uncertainty and consumer sentiment weakness remain primary downside risks.

The post Walmart (WMT) Stock Price Prediction: Where Our Price Target Sees the Stock Going Over the Next 12 Months appeared first on 24/7 Wall St..

The Walmart (NASDAQ:WMT) pullback is the story consumer staples investors are talking about this summer, and it flows through Fidelity MSCI Consumer Staples Index ETF (NYSEARCA:FSTA), Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP), and Vanguard Consumer Staples Index Fund (NYSEARCA:VDC) in surprisingly different ways. Walmart shares have fallen roughly 14% over the past 90 days, from about $130 on May 7 to about $112 on August 6. Zooming out, however, the picture changes: Walmart is up fractionally year to date, up 9% over the past year, and up 132% over five years. This looks like a drawdown inside a longer uptrend.

Walmart’s Q1 FY27 report reiterated guidance rather than raising it. The company delivered revenue of $177.8 billion, up 6.1% year over year, but flagged an approximately 700-basis-point headwind in Health & Wellness from Maximum Fair Pricing legislation and ongoing IEEPA tariff uncertainty. Meanwhile, the latest University of Michigan Consumer Sentiment Index reading is 55.2, rebounding from June’s multi-year low of 49.5. That is the macro to watch: the Bureau of Labor Statistics Consumer Price Index (CPI) print and the monthly Census retail sales release are the two data feeds most likely to move staples over the next 12 months.

FSTA: The Most Concentrated Walmart Exposure of the Three

FSTA tracks the MSCI USA IMI Consumer Staples 25/50 Index, which sweeps in small- and mid-caps alongside the giants. Its net expense ratio is 0.08%. That broader mandate has produced the heaviest Walmart weight in the group: Walmart is the top holding at 13.4% of net assets, worth about $190.0 million out of $1.4 billion in total net assets. Costco follows at 11.4%, so nearly 25% of FSTA lives in two big-box retailers. The fund is holding up (8.7% year to date) because Coca-Cola, Procter & Gamble, and the tobacco names have offset Walmart’s drag.

XLP: Narrower Index, Lighter Walmart Weight

XLP holds only the S&P 500 staples subset (about 38 names) and carries a net expense ratio of 0.09%. Walmart is still the top holding, but at a lower weight of 10.4%, followed by Costco at 9.0% and Coca-Cola at 7.2%. Because XLP has a smaller Walmart slice than FSTA despite being the more concentrated index, a single-name Walmart move actually transmits less on a percentage basis here. XLP is nearly flat on the week and up 9.6% year to date, roughly in line with peers.

VDC: Vanguard’s Broad-Basket Staples Vehicle

VDC tracks the MSCI US Investable Market Consumer Staples 25/50 Index, structurally similar to FSTA. Its net expense ratio is 0.09%. Walmart is a top holding at 14.0%, or about $1.1 billion of the fund’s net assets. VDC is also roughly flat on the week, up 1.1% on the month, and up 9.3% year to date. The tight clustering with FSTA and XLP year to date shows that even with different Walmart concentrations, diversification across roughly 100 staples names smooths out single-stock damage.

What to Watch Next

As mentioned, the macro signals to monitor are the next Census retail sales release and CPI print, given that June retail sales hit $768.6 billion, a 12-month high, and a rollover would confirm the sentiment weakness. The fund-specific signals are the next quarterly MSCI reviews for FSTA and VDC, and the S&P Dow Jones sector rebalance for XLP. If Walmart’s slide continues into the next reconstitution, FSTA’s 13.4% Walmart weight is the position with the most concentrated exposure to further downside, and the one with the most upside if the $137.98 analyst target price starts to come back into view.

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AI is already behind tens of thousands of layoffs, according to the companies that made them. The most well-known is that Block (NYSE: XYZ) laid off 40% of its workforce in March. Oracle (NASDAQ: ORCL) fired 21,000 people earlier this year.

The layoffs were made in the name of AI, making their workforces more productive. However, skeptics said it was simply a matter of improving the bottom line. This was cynical and impossible to prove.

The Oracle and Block layoffs were part of what is supposed to be an AI Armageddon. This would spread from junior bankers who analyze bank deals to the people who handle checkout at Walmart (NYSE: WMT). The figure is supposed to eventually be in the millions. If so, it could drive US unemployment to double digits and damage the economy.

Finally, a company has said it will lay people off to return to its core business. Etsy (NASDAQ: ETSY) cut 12% of its workforce, which was 220 people. Most were in its product and engineering operations. It forcefully said AI was not a factor. It was just a simple way to make its business more focused. The cuts weren’t driven by cost-cutting initiatives or artificial intelligence, Chief Executive Kruti Goyal said in a message to Etsy’s workers. “Buyers are discovering products in new ways. Sellers have access to increasingly powerful tools to build their businesses. And the expectations they have of Etsy continue to rise.”

Etsy posted strong quarterly earnings when it made the worker announcement. Revenue rose 6% to $668 million from the same period the year before. EPS rose to $.98 from $.39. The numbers were from “continuing operations.” It had sold one of its divisions, which affected its figures.

Etsy’s announcement does not prove that AI will never affect job decisions. It does show, however, that sometimes a layoff is just a layoff because a company can make more sense of itself when it restructures.

The post At Last, One Big Layoff Not Caused By AI appeared first on 24/7 Wall St..

After a choppy summer, Amazon (NASDAQ:AMZN) is trading at $232.11, down 6.12% over the past week yet still holding a razor-thin 0.56% year-to-date gain. The rally that carried shares to $278.56 earlier this year has cooled. Our proprietary model says the next leg is up.

The 24/7 Wall St. price target for Amazon is $307.53, implying 32.49% upside over the next 12 months. Our recommendation is buy, with a confidence level of 90%.

AWS reacceleration, a $70 billion advertising business, and a custom silicon franchise running at a $20 billion clip make the risk/reward attractive.

24/7 Wall St. Price Target Summary

A Summer Pullback Inside a Bigger Rally

Amazon is roughly flat over one year (-0.05%) and down 0.92% over the past month, sitting about 12% off the 52-week high of $278.56 and well above the low of $196.

The pullback follows a blowout Q1 FY26 report where EPS of $2.78 beat the $1.73 consensus by 60.69%, revenue climbed 16.6% to $181.52 billion, and AWS grew 28%, its fastest pace in 15 quarters. Prediction markets on Polymarket assign a 91.5% probability that Amazon beats when it reports on July 30.

Why Bulls See a Breakout Ahead

The bull case rests on AWS converting AI hype into contracted revenue. OpenAI committed to roughly 2 GW of Trainium capacity beginning 2027, Anthropic secured up to 5 GW, and Amazon’s chips business is now a $20 billion annualized franchise growing triple digits.

Advertising crossed $70 billion TTM, and unit growth in Stores hit 15%, the highest since COVID. CEO Andy Jassy noted “We’re in the middle of some of the biggest inflections of our lifetime, we’re well positioned to lead.” If AWS holds 28% growth and margins stabilize, the bull-case path to $352.55 is achievable.

What Could Go Wrong

The bear case centers on capital intensity. Amazon has guided to roughly $200 billion of CapEx in 2026, with Q1 alone consuming $44.2 billion, up 76.68% YoY. TTM free cash flow collapsed roughly 95% to $1.2 billion, long-term debt doubled to $119.1 billion, and AWS margin slipped to 37.7% from 39.5%.

Q1 net income was also flattered by a $16.80 billion Anthropic mark-to-market. Bulls counter that this spend funds Trainium2, Project Rainier, and 1 million-plus NVIDIA GPUs, all converting to contracted AWS revenue. A bear-case rerating gets us to $268.19.

How Amazon Compares to Microsoft and Walmart

Microsoft (NASDAQ:MSFT) is the natural cloud comp. Azure grew 40% last quarter versus AWS at 28%, but Microsoft trades at a trailing P/E of 28, on top of Amazon’s 28. Similar multiples for slower AWS growth make our target reasonable.

Walmart (NYSE:WMT) anchors the retail side. Walmart trades at a trailing P/E of 40 on FY26 revenue of $713 billion and mid-single-digit growth, while Amazon grows retail units at 15% and has AWS and advertising on top. Amazon at 28x forward looks cheap next to Walmart at 40x.

I’d Buy It Here

The 24/7 Wall St. price target of $307.53 and buy rating reflect a 90% confidence read that AWS reacceleration and the ad flywheel outweigh the CapEx overhang.

I’d add here if the July 30 earnings report confirms AWS growth in the high-20s and Q3 guidance lands near the high end. I’d stay patient if AWS growth decelerates below 25% or operating income guidance falls short of $22 billion.

These projections assume Amazon executes on its AI infrastructure buildout and preserves AWS margins near 35%. Significant upside or downside could come from AWS margin trajectory, tariff policy, and how quickly OpenAI and Anthropic capacity ramps.

The post Can Amazon Continue Its Rally? Analysts Weigh In appeared first on 24/7 Wall St..

Three retail heavyweights sit at very different points on the risk/reward map right now. Walmart (NYSE:WMT) at $109.47 looks fully valued, Costco (NASDAQ:COST) at $935.03 screens richly priced, and Home Depot (NYSE:HD) at $332.98 screens as the most attractive risk/reward.

University of Michigan consumer sentiment just printed 44.8, well inside recessionary territory, which frames every verdict below.

Walmart: Elite Execution, Uncomfortable Multiple

Walmart is down 1.35% year to date and 8.01% over the past month, lagging a broader market that has kept grinding higher. Q1 FY27 revenue rose 6.08% to $175.68 billion, adjusted EPS came in at $0.66, global ecommerce grew 26%, and advertising jumped 37%. CEO John Furner credited “better shopping experiences, a broader assortment, and faster delivery.”

The catch is valuation. WMT trades at roughly 39x trailing earnings with a 0.86% dividend yield. The Street sees upside to a $138.27 target, with 37 Buy, 5 Hold, and 1 Sell ratings, but insiders are net sellers and Q1 free cash flow turned negative at -$1.95 billion as capex climbed 34%. Treat targets as one data point among many.

At $109.47, Walmart’s setup argues for patience. Here is why. The flywheel of ads, marketplace, and membership is best-in-class, but paying 39x for a low-single-digit revenue grower leaves little margin for error. A retest of the $94.85 52-week low would open a cleaner entry. Watch capex intensity and marketplace margin conversion into next quarter.

Costco: Best-in-Class, Priced Like It

Costco is up 8.91% YTD and roughly flat over the past year. Q3 FY26 delivered $70.53 billion in revenue (up 11.58%), EPS of $4.93, reported comps of 9.8%, and a worldwide renewal rate of 89.7%. Digitally-enabled comps grew 21.5%.

Analysts carry a $1,076.91 consensus target with 22 Buy, 13 Hold, and 2 Sell ratings. The friction point is a P/E near 47x, which already prices in most of the operational excellence. Composite sentiment sits at a neutral 54.09, and insider activity skews to selling.

At $935.03, Costco’s risk/reward looks balanced at best. Here is why. Membership renewal, warehouse expansion toward 940 locations, and Kirkland pricing power remain unmatched, but forward returns compress when you pay this multiple for high-single-digit comps. A pullback closer to $850 would strengthen the case; today’s setup favors patience over accumulation.

Home Depot: Housing Pain Looks Priced In

Home Depot has been the laggard, down 1.83% YTD and 8.36% over the past year. Q4 FY25 adjusted EPS of $2.72 beat consensus by 7.94%, comparable sales edged up 0.4%, and average ticket rose 2.4%. FY25 revenue reached $164.68 billion, with over 1,250 SRS locations now integrated.

HD trades at roughly 23x earnings with a 2.76% dividend yield backed by the 156th consecutive quarterly payout. The consensus target sits at $370.34, implying roughly 12% upside, split 21 Buy and 15 Hold with zero Sell ratings. Insiders are net buyers, a rare positive signal across this group.

At $332.98, Home Depot screens as the most attractive of the three. Here is why. Consumer sentiment at 44.8, elevated mortgage rates, and weak big-ticket demand are already reflected in the compressed multiple and the $286.95 52-week low.

When housing turnover normalizes, the pro channel via SRS and GMS plus deferred remodel demand should drive operating leverage on a base that already grew FY25 sales 3.24%. The invalidation is a deeper housing recession that pushes FY26 EPS below the flat-to-4% guide. With insider buying, a growing dividend, and the cleanest valuation of the three, the reward-to-risk here looks the most attractive.

The post 3 Top Retail Stocks: Buy, Sell or Hold? appeared first on 24/7 Wall St..

I keep pressing the buy button on Amazon (NASDAQ:AMZN), and the reason is embarrassingly simple: the crowd is looking at the capex line and flinching, while I am looking at what that capex actually builds.

That is the whole thesis in one sentence. Amazon is spending in 2026 to own the compute layer of the AI economy in 2027 and beyond. The market treats the near-term free cash flow squeeze as a wound. I read it as a receipt.

The Three Numbers That Keep Me Buying

Start with AWS. In Q1 2026 it grew 28% year over year, fastest in 15 quarters, on a $150 billion run rate. Jassy said “It is very unusual for a business to grow this fast on a base this large.” Segment operating margin 37.7%, operating income $14.2 billion. That is the engine.

Next, chips. Amazon’s silicon business (Graviton, Trainium, Nitro) topped a $20 billion revenue run rate growing triple digits year over year. Trainium2 is largely sold out. OpenAI committed to roughly 2 GW of Trainium capacity beginning in 2027. Anthropic secured up to 5 GW. AWS backlog sits at $364 billion, and that excludes an Anthropic commitment for over $100 billion.

Third, the whole business prints. Q1 EPS came in at $2.78 versus a $1.653 estimate, a 68.18% beat, the fifth straight beat. Operating income $23.85 billion, up 29.6% YoY. Operating cash flow $26.03 billion, up 52.99%. ROE 22.29%, net debt to EBITDA 0.45, interest coverage 35.17x.

The stock closed at $247.55, up 7.25% YTD, while AMZN slipped 4.7% since the April filing. Analyst target is $312.87 with 62 buys and zero sells.

Why Not the Obvious Alternatives

Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are the obvious cloud picks. Amazon leads both on custom AI training silicon at Trainium’s scale. Its chip business is over $20 billion run rate with more than $225 billion in revenue commitments and OpenAI plus Anthropic locked in. Jassy: “Trainium will save us tens of billions of dollars of CapEx each year and provide several hundred basis points of operating margin advantage.”

Walmart (NYSE:WMT) is the retail comp. Amazon’s Online Stores grew 12%, third-party sellers 14%, and unit growth hit 15%, the highest since COVID. Walmart does not carry a $150 billion cloud business alongside that.

Meta (NASDAQ:META) is the ad alternative. Amazon’s ad segment ran $17.24 billion in Q1, up 24% YoY, with over $70 billion TTM. One AMZN share buys three growth engines.

The Real Risk

TTM free cash flow fell to $1.2 billion, down 95%. Q1 capex was $44.2 billion; the 2026 plan is roughly $200 billion. Long-term debt climbed to $119.1 billion from $65.6 billion. If AI monetization slips, that overhang stings.

Jassy addressed it directly: data centers carry 30-plus year lives, chips and servers five to six years. I am fine with a compressed FCF year sitting behind $364 billion of backlog.

What Keeps the Buy Button Active

Polymarket assigns 98.5% probability to 2026 capex exceeding $170 billion. Consensus has accepted the number without repricing the outcome. That gap is my window. The five-year base case models $523.92, a 111.64% total return. I keep buying because 2027 will not send an invitation.

The post The Masses Will Ignore Amazon But I Am Me Buying More Now appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) and Procter & Gamble (NYSE:PG) both just delivered results that reveal how two consumer defensive giants navigate the same tariff-heavy backdrop from opposite ends of the aisle.

Walmart owns the shelf and the customer. P&G supplies the brands sitting on that shelf. Comparing their most recent quarters shows why one is accelerating while the other quietly leans on pricing and productivity to hold the line.

Omnichannel Momentum Meets Beauty-Led Defense

Walmart’s Q1 FY27 landed on May 21, 2026 with revenue of $175.68 billion, up 6.08% year over year, and adjusted EPS of $0.66. The real story sits underneath: global eCommerce grew 26% and now represents 23% of total net sales, marketplace sales jumped nearly 50%, and global advertising climbed 37%.

New CEO John Furner emphasized “better shopping experiences, a broader assortment, and faster delivery”, and it shows in 4.1% U.S. comp growth powered by upper-income households.

P&G reported Q3 FY26 on April 24, 2026 with net sales of $21.235 billion, up 7.4%, and core EPS of $1.59. Organic growth was a steadier 3%, with Beauty leading at 7% organic behind Hair Care, Personal Care, and Skin Care. New CEO Shailesh Jejurikar called it “a solid acceleration in top-line results”, though core gross margin still compressed 100 basis points from mix and reinvestment.

Scale Platform vs. Brand Portfolio

Walmart is reinvesting aggressively, with capex up 34% to $6.684 billion, pushing free cash flow to -$1.9 billion in the quarter. That is uncomfortable in isolation, but it funds automation, delivery speed, and a fast-scaling ad engine.

P&G is playing a tighter game: gross productivity savings of 210 basis points, roughly $10 billion in dividends, and $5 billion in buybacks planned for FY26, with guidance now expected toward the lower end.

Walmart trades at a trailing P/E of 40 versus P&G at 21. Investors are paying up for growth on one side and reliability on the other.

What the Next Six Months Will Actually Test

I will keep an eye on whether Walmart’s 8.9% inventory build converts cleanly or signals demand softness, and whether Walmart Connect ad revenue can keep compounding at 44% ex-VIZIO.

For P&G, the question is whether Beauty and Grooming innovation can lift organic growth above the current 3% pace while tariffs stay a $400 million annual weight.

Why I Lean Walmart for Growth, P&G for Sleep-at-Night

Personally, I find Walmart the more interesting business story right now. The 21.82% one-year gain reflects real operating momentum, not just multiple expansion.

If you want a growth-flavored consumer defensive with a scaling ad and marketplace flywheel, WMT fits. That said, I would not fault anyone owning P&G for the 2.89% yield and its 136 years of uninterrupted dividends.

For income-focused investors or anyone bracing for a bumpier tape, the Dividend King still earns its keep. My hesitation on both: Walmart’s valuation leaves little margin for a stumble, and P&G needs volume to reaccelerate before I would upgrade my view.

The post Walmart vs Procter & Gamble: Two Consumer Titans, Two Strategies, One Winner appeared first on 24/7 Wall St..

Costco (NASDAQ:COST) stock stands out as one of the strongest setups in the retirement investor’s playbook right now, and the case rests on three numbers that are hard to argue with. The membership economics are hardening, the balance sheet is getting stronger by the quarter, and the growth premium versus the obvious alternative keeps widening. This is a conviction position.

The Membership Machine Is Compounding Faster

Costco posted Q3 FY2026 revenue of $70.53 billion, up 11.58% year over year, with net income climbing 15.19% to $2.19 billion. Membership fees alone reached $1.37 billion, up 10.7%, with a worldwide renewal rate of 89.7% and 75.0% executive-tier penetration. That is annuity-like income growing at a double-digit clip, the kind of cash-flow profile retirement portfolios tend to prize behind an equity position.

Balance Sheet Built for Payouts

Cash and equivalents jumped to $18.95 billion, a 36.93% year-over-year gain, while shareholders’ equity expanded 23.54%. CFO Gary Millerchip signaled that a special dividend remains on the table, noting Costco continues to “generate excess cash beyond those priorities”. Costco has paid special dividends of $15 in 2023, $10 in 2020 and $7 in 2017. The regular quarterly dividend already stepped up to $1.47 in May 2026 from $1.30. Retirees get a growing base payout plus periodic lump-sum surprises.

The Head-to-Head With Walmart Is Not Close

Walmart (NASDAQ:WMT) is the natural comparable, and it loses on the metrics that matter for a compounder. Walmart’s quarterly revenue grew just 7.3% versus Costco’s 11.58%, and quarterly earnings growth was 19.4% against Costco’s 15.19% off a much larger base. Costco’s return on equity is 29.1% versus Walmart’s 24.1%.

Yes, Walmart yields 0.85% to Costco’s 0.57%, but Walmart trades at a forward P/E of 38x versus Costco’s 42x. That is a small premium for meaningfully faster growth and a membership annuity Walmart cannot replicate.

The One Risk, Dismissed

Consumer sentiment sits at 44.8, deep in pessimistic territory. Yet retail sales hit a high of $763.7 billion in May, a 90.9th percentile reading. Costco’s 89.7% renewal rate proves members do not cancel a $130 card when times get tight. They trade down into Kirkland, and Costco captures the wallet share anyway.

For retirement investors seeking a durable compounder with rising income and optional special-dividend upside, Costco around $938 screens as a durable compounder worth research.

The post Costco Is a No-Brainer Buy for Retirement Investors Right Now appeared first on 24/7 Wall St..

Costco (NASDAQ:COST) has been one of the most crowded long trades in consumer retail for years. After a choppy first half of 2026, the question is whether the warehouse giant still has room to run.

My model says yes, but only modestly. Costco traded at $945.57 as of the last close, and the 24/7 Wall St. price target for Costco is $1,041.86, implying 10.18% upside over the next 12 months. The model’s rating is buy, and confidence is high at 90%.

What the Recent Price Action Is Telling Us

Costco is up 9.96% year to date but has cooled recently, falling 4.17% over the past month after touching a 52-week high of $1,096.50. The 52-week low sits at $841.69, so shares trade in the upper half of that range.

In fiscal Q3 2026, Costco delivered EPS of $4.93 on revenue of $70.53 billion, up 11.6% year over year, with comparable sales up 9.8%, digital comps up 21.5%, and membership fee income of $1.373 billion. The worldwide renewal rate held at 89.7%.

Why Bulls See a Breakout Ahead

The bull case rests on the flywheel. Membership fee income compounds above 10% annually, executive members represent 75% of net sales, and e-commerce traffic jumped 37% last quarter. Costco plans to end fiscal 2026 with roughly 940 warehouses, up from 914, and free cash flow reached $7.84 billion in fiscal 2025.

Consumer spending on food rose to $1,566.8 billion in May 2026 from $1,518.3 billion a year earlier, and Goldman Sachs calls out Costco as capturing outsized share through value offerings, operational leverage, and effective supplier negotiations. If digital growth holds above 20% and membership economics expand, our bull scenario pushes shares to $1,139.55, a 20.51% return.

What Could Go Wrong

Costco trades at a trailing P/E of 46x and forward P/E of 41x, an unforgiving multiple if growth decelerates. Management flags tariff exposure, FX headwinds, and rising healthcare and wage costs as active risks.

Recent insider activity leaned toward selling, and 30-day sentiment slipped 13.44 points. The recent PEG of 4.518 reflects heavy reinvestment in Kirkland innovation, international warehouses, and digital infrastructure. The bear scenario limits downside to $956.56, essentially flat.

How Costco Compares to Walmart and BJ’s Wholesale

Walmart (NYSE:WMT) trades at $114.95 against an implied P/E of 42x and forward EPS of $2.94, with 86% of analysts bullish and quarterly earnings growth of 19.4%. Walmart is cheaper on forward earnings than Costco but grows earnings roughly half as fast, supporting Costco’s premium.

BJ’s Wholesale Club (NYSE:BJ) is the closest pure-play comparison. BJ posted Q1 fiscal 2027 EPS of $1.10 on revenue of $5.66 billion with full-year adjusted EPS guidance of $4.40 to $4.60, digital comps up 28%, and a market cap of $11.88 billion. Membership fee growth of 9.9% trails Costco’s, and net income fell 4.7%. Against that field, our $1,041.86 target looks reasonable.

Costco Price Prediction 2026-2030

The 24/7 Wall St. price target of $1,041.86 and buy rating reflect durable membership economics, accelerating digital growth, and a resilient consumer backdrop. Valuation keeps me from pounding the table.

The setup improves if Costco pulls back toward the 200-day average near $956 or delivers another double-digit comp quarter. Risk rises if the multiple pushes above 50x on decelerating traffic. Confidence remains 90%, and the target still points higher.

Here is where our model projects Costco could trade, assuming steady mid-single-digit comp growth and consistent membership expansion.

These projections assume Costco executes on warehouse expansion, membership growth, and Kirkland Signature innovation. Significant upside or downside could result from tariff policy shifts, consumer slowdown, or accelerating international rollout.

The post Price Prediction: Will Costco Hit a New-High This Year? appeared first on 24/7 Wall St..

I keep hitting the buy button on Amazon (NASDAQ:AMZN), and the $25 billion bond sale gave me three fresh reasons to keep going. I have owned this stock for years, and every time management pulls a lever this obvious, I add. The market treated the debt raise like a warning. I read it like a receipt.

The Cost of Capital Arbitrage I Keep Waiting For

The 10-year Treasury sits at 4.55%, in the 94th percentile of the past 12 months. That yield looks rich in a vacuum, yet Amazon’s interest coverage ratio is 35.17x, which means the company can absorb this coupon in its sleep. Peak demand on the offering hit $62 billion, 2.48 times oversubscribed, across eight tranches maturing from 2029 to 2066. Institutional buyers effectively fought each other to hand Amazon 40-year money. That preserves the $101.82 billion of cash on the balance sheet for acquisitions, chip design, and whatever Andy Jassy sees next. Debt funds the concrete. Cash stays weaponized.

The Capex Is Already Pre-Sold

This is where I get loud with friends who think Amazon is overspending. The roughly $200 billion 2026 capex plan funds physical data center capacity backed by AWS’s $364 billion commercial backlog. AWS grew 28% year over year in Q1, the fastest in 15 quarters, at a 37.7% operating margin. Anthropic is contracted for up to 5 GW of Trainium capacity. OpenAI committed roughly 2 GW starting 2027. Project Rainier is deploying 500,000-plus Trainium2 chips. The chips business already runs at a $20 billion annual revenue rate, growing triple digits. The bonds pay for buildings that are already leased in economic terms.

Peak Debt, Then the Runway Clears

Management framing this as the final debt tap of the year removes an overhang I was already discounting. Operating cash flow hit $139.51 billion in 2025 against $131.82 billion of capex. Debt-to-assets improved from 30.3% in 2022 to 18.7% in 2025 even while the asset base doubled. Once capex intensity normalizes, free cash flow snaps back and the multiple has room to breathe.

Why Amazon, Not Microsoft or Alphabet

I looked hard at Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL). Both are quality. Neither has the same operating leverage story from here. Amazon’s North America retail margin expanded to 7.9% from 6.3%, international operating income grew 40%, and Q1 EPS of $2.78 beat the $1.73 consensus by 60.69%. That is a fifth consecutive beat. I also passed on Walmart (NYSE:WMT) because retail alone cannot compound against a business where advertising just crossed $70 billion in trailing revenue growing 24%. Amazon pays no dividend, and that suits me. Every retained dollar funds Trainium, robotics, and Leo satellites.

The Risk I Own Openly

Free cash flow collapsed. TTM free cash flow fell 95% to $1.2 billion as property and equipment purchases jumped $59.3 billion year over year. If AWS demand ever wavers, that capex looks foolish. I keep buying because the $364 billion backlog is contractual, the Bedrock platform processed more tokens in Q1 than in all prior years combined, and interest coverage of 35x leaves room for a bad year.

Analysts carry a $314.35 average target against my $249.89 cost basis today. That gap is my margin of safety, and the bond sale just financed the growth that closes it. My buy button stays warm.

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July is off to a jittery start. The VIX closed at 17.16 on July 13, up 14.2% in a single session and 10.2% for the week. The 10-year to 2-year Treasury spread sits at just 0.36%, in the 5.6th percentile of the past 12 months. University of Michigan Consumer Sentiment printed 44.8 in May, down from 61.7 last July and approaching the sub-60 recessionary zone.

The Sahm Rule is not flashing red and was sitting at 0.07 in June, well below the 0.50 recession trigger, so this is a positioning trade rather than a crisis hedge. Three U.S.-listed defensives fit the moment: Walmart (NYSE:WMT) in staples retail, Duke Energy (NYSE:DUK) in regulated power and McDonald’s (NYSE:MCD) in global quick-service restaurants. Each carries a coherent bull case and a risk investors should not overlook.

Walmart (WMT)

Walmart is the cleanest way to play trade-down behavior when household budgets tighten. Q1 FY27 delivered Adj EPS of $0.66 on revenue of $175.68B, up 6.1% year over year, with global eCommerce sales up 26% and U.S. comps up 4.1% ex-fuel. Management is taking share across income tiers, including upper-income households. Higher-margin ancillaries are compounding fast: global advertising rose 37% and membership fees rose 17.4%.

The capital return story is stiffening. Walmart raised its quarterly payout to 24 cents for 2026, up from 23 cents in 2025 and 20 cents in 2024, and authorized a new $30 billion buyback in February with $28.2 billion remaining. As of July 15, shares are up 19.58% over the past year despite a 5.59% one-month pullback, which has created a cleaner entry.

Risk: valuation is not cheap at a P/E of 42, and fuel costs are running as a ~250bps operating income headwind with inventory up 8.9%. Tariff and IEEPA uncertainty can compress guidance in a hurry.

Duke Energy (DUK)

Duke Energy is the least correlated name on this list to the AI hype cycle, yet it is a direct beneficiary of it through power demand. Q1 2026 marked a fourth consecutive earnings beat, with adjusted EPS of $1.93 topping the $1.7951 estimate by 7.51% and revenue of $9.18 billion up 11.3%. Management reaffirmed 2026 Adj EPS guidance of $6.55 to $6.80 and pointed to long-term growth of 5% to 7% through 2030, with confidence in the top half beginning 2028.

The setup rests on a $103 billion five-year capital plan driving 9.6% earnings base growth and 7.6 GW of economic development projects secured under Electric Service Agreements tied to data center and advanced manufacturing demand. As of July 15, shares are up 7.89% year to date. The trailing 12-month dividend of $4.6116 reflects a payer that has never skipped a quarterly distribution in the dataset.

Risk: rising interest expense weighs on capital-intensive utilities, and industrial electric sales fell 2.1% year over year. If contracted data center load ramps slower than the capex schedule assumes, the earnings algorithm gets stress-tested.

McDonald’s (MCD)

McDonald’s is the contrarian pick. As of July 15, shares are down 11.14% year to date and 10.06% over the past year, sitting well below the 52-week high of $337.56 and the analyst target of $328.87. That is the setup, not the thesis.

The fundamentals turned in Q1. Global comparable sales rose 3.8% versus -1.0% a year ago, with U.S. comps up 3.9% and all segments positive. Loyalty is now a genuine moat: systemwide sales to members exceeded $9 billion in the quarter and topped $38B on a trailing 12-month basis across 70 markets. Revenue of $6.52B was up 9.4%, and management guided to operating margin in the mid-to-high 40% range.

Income investors get paid to wait. The quarterly dividend was raised to $1.86 in Q4 2025, up from $1.77, extending a growth streak that has taken the annual payout from $0.77 quarterly in 2013 to $1.86 in 2026. Beta of 0.418 means the name should hold up if the VIX pushes higher. Analyst positioning skews constructive with 14 Buy ratings and five Strong Buy ratings against one Sell rating.

Risk: the effective tax rate rose to 22.0% from 19.8%, restructuring charges run through 2027, and international markets carry geopolitical and anti-American sentiment exposure that a value menu cannot fix.

What to Watch Next

The through-line is cash flow that shows up whether the S&P is green or red. Walmart is the trade-down lever, Duke Energy is the rate-base compounder with an AI kicker and McDonald’s is the loyalty-driven dividend grower trading at a discount to its own history. If July gets ugly, keep an eye on Walmart’s Q2 report and the next VIX reading above 20 as signals that defensives are being priced correctly rather than as a crowded trade.

The post 3 Stocks to Own When the Market Gets Ugly in July appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) and Johnson & Johnson (NYSE:JNJ) just delivered results that show two defensive giants pulling on very different levers.

Walmart posted $175.68 billion in Q1 FY27 revenue with omnichannel firing on all cylinders. J&J leaned on its pharma pipeline to grow Q1 2026 sales 9.9%. Both beat estimates. The playbooks could hardly look more different.

Retail Flywheel Meets Pharma Firepower

Walmart’s quarter was a story of stickiness turning into leverage. U.S. comp sales rose 4.1% ex-fuel on 3.0% transaction growth, and global eCommerce jumped 26%, now 23% of sales. Advertising climbed 37%, and marketplace sales surged nearly 50%, the best in ten quarters.

Upper-income households keep trading in, and CEO John Furner credited “innovative technologies, driving productivity through automation, and growing higher-margin commerce solutions.” Free cash flow turned negative at -$1.95 billion as capex jumped 34%. That signals investment in future throughput capacity.

J&J’s engine ran on drugs. Innovative Medicine rose 11.2% to $15.43 billion, with DARZALEX at $3.96 billion (+22.5%) and TREMFYA up 68.3%, absorbing the STELARA biosimilar shock. MedTech added 7.7%, led by cardiovascular. CEO Joaquin Duato called the pipeline “unrivaled,” pointing to fresh approvals like ICOTYDE and VARIPULSE Pro.

One Widens The Store. One Prunes The Portfolio.

Walmart is widening: more delivery, more marketplace sellers, more ad inventory through VIZIO.

J&J is narrowing, planning a DePuy Synthes orthopaedics spinoff within 18 to 24 months and pouring over $1 billion into cell therapy manufacturing. Different visions of defense.

The Next Test Is Whether Consumers Hold Up

With University of Michigan consumer sentiment at 44.8, near recessionary territory, I want to see whether Walmart’s upper-income share gains survive a broader pullback.

J&J faces a nearer catalyst: prediction markets currently price a 92.5% probability of a Q2 EPS beat, with Innovative Medicine consensus clustering around $16.2 to $16.65 billion. Guidance was already raised to $11.45 to $11.65 adjusted EPS for the year.

Why I Lean Toward J&J At These Prices

Both are quality. You are paying very differently for them.

Walmart trades at a trailing P/E of 40 with a 0.85% yield, while J&J sits near 30 with a 2.01% yield and 21.8% profit margins versus Walmart’s 3.14%.

J&J shares are already up 25.56% year to date, and I still find the pipeline math more compelling than paying 39 times forward earnings for a retailer with negative free cash flow this quarter. Walmart offers brand-driven compounding for investors patient with tariff noise. J&J’s combination of yield, margins, and pipeline stands out at these valuations.

The post Walmart vs Johnson & Johnson: Two Defensive Plays, Diverging Strategies and One Winner appeared first on 24/7 Wall St..

Jim Cramer used his Monday CNBC Stop Trading segment to flag a familiar play he’s seeing coming back into focus. Cramer noted that when the cost of living squeezes household budgets, capital rotates into discount retailers, and the hedge fund crowd tends to get there first. That’s why he says he’s keeping an eye on Dollar General (NYSE:DG).

Why Rising Gas Prices Send Hedge Funds Into Dollar General

Jim Cramer bluntly connected the dots he sees between rising oil prices and soaring discount retailer performance. “When things go up for the consumer, we go back to these stocks,” he said, before laying out his trade idea: “Dollar General just is a favorite of the hedge fund crowd. It’s kind of an algorithm that says, oh, oil goes up, gasoline therefore goes up, go buy Dollar General.”

He also pointed to Dollar Tree’s upgrade last week, which he said drove the stock from $85 to $130 in a couple of months, and flagged Walmart as the validation to watch: “I’m waiting for it to impact Walmart, which is a big winner.”

The Consumer Squeeze Is Reviving the Trade-Down Economy

WTI crude sits at above $78 per barrel, well off the 12-month high of $114.58 on April 7, 2026, and the U.S. regular gasoline average has eased to $3.78 per gallon. But retail pump prices spent much of the spring above $4.50, and University of Michigan consumer sentiment collapsed to 44.8 in May 2026, approaching recessionary levels. Trade-down behavior into value shopping is exactly what that combination could produce.

Dollar General’s Q1 FY2027 report filed on June 2, mapped directly onto Cramer’s thesis. Diluted EPS came in at $2.00 versus $1.88 consensus, revenue was $10.79 billion, same-store sales rose 2.0%, and gross margin expanded 65 basis points to 31.6%.

CEO Todd Vasos said results “exceeded our expectations as strong operating margin expansion more than offset the impact of severe winter weather and higher fuel costs.” Management then raised FY2026 EPS guidance to $7.20-$7.45.

Dollar General has climbed 8.7% over the past month and was up 4.73% on the day of Cramer’s segment, trading at $124.55. Shares still carry a modest trailing P/E ratio of 17.

Dollar Tree, Walmart, and Five Below As Other Potential Beneficiaries

Dollar Tree (NASDAQ:DLTR) is up 13.23% over the past month. Q1 delivered adjusted EPS of $1.74 versus $1.55 consensus on revenue of $4.98 billion, and management raised the FY26 range to $6.70 to $7.10.

Walmart (NYSE:WMT) reported Q1 FY2027 results showing Walmart U.S. comps up 4.1% ex-fuel and global e-commerce up 26%, with share gains skewing towards upper-income demographics. Walmart trades at a P/E near 41, and shares are down 5.55% over the past month.

Five Below (NASDAQ:FIVE) reported Q1 net sales growth of 32.5% and comparable-store sales growth of 22.7%, with FY26 EPS guidance of $8.65 to $9.05. Shares are up 45.48% over the past year.

What to Watch Next

Cramer’s broader argument is that rising household costs could push more consumers toward discount retailers, benefiting Dollar General, Dollar Tree, Walmart, and Five Below. Dollar General’s improving margins and raised earnings guidance suggest that shift may already be underway.

If Walmart’s upcoming results show stronger trade-down activity, the trend could be developing into a broader defensive investment theme rather than a short-term hedge fund trade.

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Walmart (NYSE:WMT) and Costco (NASDAQ:COST) both posted fresh quarters reinforcing their status as safe havens, but the underlying businesses are pulling in different directions. Walmart leaned on automation, advertising, and marketplace scale. Costco leaned on membership renewals and Kirkland. With consumers guarded on discretionary goods, the comparison feels sharper than usual.

Automation Lifts Walmart. Memberships Steady Costco.

Walmart’s Q1 FY27 revenue reached $175.68 billion, up 6.1% year over year, with global eCommerce climbing 26% and advertising revenue up 37%. CEO John Furner framed it plainly: “Our teams are adopting innovative technologies, driving productivity through automation, and growing higher-margin commerce solutions.” Marketplace sales jumped nearly 50%, the best in 10 quarters, and general merchandise share gains were the strongest in five years, notably among upper-income households.

Costco’s Q3 FY26 revenue hit $70.53 billion, up 11.58% year over year, with comparable sales of +9.8% and digitally-enabled comps +21.5%. Membership fees rose 10.7%, and worldwide renewals held at 89.7%. The digital story centers on personalized carousels and mobile ordering, staying short of enterprise AI.

One Retailer Is Rebuilding Its Cost Base. The Other Is Optimizing.

Walmart is spending hard to convert scale into structural margin. Roughly 60% of stores now receive automated freight, and the VIZIO acquisition is turning connected TV into an advertising platform. Capex ran $6.68 billion in Q1, up 34% YoY, which pushed free cash flow negative. The AI-fueled ad and marketplace flywheel is a genuine margin lever.

Costco’s model is more surgical. Plans call for ~12 new warehouses and 940 total by year-end FY26, with Kirkland price cuts on select items. The tech playbook feels narrower.

The Next Test Is Whether AI Actually Widens Margins

I want to see Walmart Connect keep compounding and marketplace mix keep lifting general merchandise gross rate. On Costco, I am watching whether renewal rates stay near 90% now that pricing has crept higher. Valuation matters: WMT trades at 37x forward earnings versus Costco at 41x. Neither is cheap.

Why I Lean Toward Walmart for This Cycle

On the current setup, Walmart looks like the more compelling story. The Gemini partnership and algorithmic fulfillment cost frameworks give it a credible path to expanding 4.18% operating margins on a $713 billion revenue base. Costco remains a fortress with renewal-driven predictability that appeals to defensive-minded readers. The AI-powered advertising and automation flywheel at Walmart is the more interesting margin story into 2027, especially with 37 buy ratings versus 1 sell backing the thesis. I would reconsider if tariff refunds slip or inventory keeps building.

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In early July 2026, Walmart (NYSE:WMT) made headlines by revealing it would be trimming prices on a batch of grocery and household staples, including double-digit cuts on ground beef and price drops of more than a third on multipacks of Coca-Cola. The takeaway for shoppers was simple: prices are the focus right now. For retirees, though, a modest cut on cereal or laundry detergent does not undo the squeeze. It also does not answer the harder question many are quietly asking themselves at the kitchen table: should I just turn on Social Security at 62 and be done with it?

The Squeeze Is Real, and It Is Pushing People to Claim Early

Consider a woman, 62, widowed, working part-time, watching her grocery bill creep up while her savings account earns less than her utility bill. She is simply tired. On a retirement forum recently, a member in almost exactly her spot asked whether there was any “meaningful reason” to wait past 62, or whether claiming now just made sense.

The numbers behind that feeling are not imagined. University of Michigan consumer sentiment fell to 44.8 in May 2026, deep in pessimistic territory. Headline PCE inflation ran at about 4% in the 12 months leading up to May, with services inflation and energy prices soaring from a year earlier. The personal savings rate has slipped to 3.0%, a four-year low.

A retailer as large as Walmart cutting prices on thousands of items is a real, if partial, offset. It is also a signal in itself: the nation’s biggest grocer does not slash prices this broadly unless it is responding to a household budget that is already stretched thin. That is the world our retiree is deciding in.

The One Number That Actually Drives This Decision

Here is the mechanic that matters more than anything else: for anyone born in 1960 or later, Full Retirement Age (FRA) is 67, and claiming at 62 permanently cuts the monthly check by roughly 30%. Going the other direction, every year you delay past FRA to 70 adds about 8%.

Put that in dollars. If Diane’s benefit at 67 would be $2,000 a month, claiming at 62 locks her in near $1,400. That is roughly $600 a month, more than $7,000 a year, erased for the rest of her life. If she lives to 87, that is a quarter century of a smaller check.

Now layer the cost-of-living adjustment (COLA) on top. The 2026 COLA came in at 2.8%. Cost-of-living adjustments are percentages, so they apply to whatever base you locked in. A 2.8% raise on $1,400 is smaller in dollars than a 2.8% raise on $2,000, and that gap compounds every year inflation stays elevated. The very problem that made Diane want to claim early, prices rising faster than her income, is the problem an early claim quietly makes worse over time.

How It Fits With Everything Else

Social Security does not sit alone. Two interactions matter most for someone in Diane’s position.

First, the earnings test. In 2026, if you claim before FRA and keep working, Social Security withholds $1 for every $2 earned above roughly $24,480. For a part-time worker, claiming at 62 can mean handing part of the check right back.

Second, the survivor benefit. If Diane were married, the higher earner delaying would raise the floor the surviving spouse eventually lives on. That protection is one of the most under-appreciated reasons to wait, and it is invisible on any single-year spreadsheet.

A quick way to pressure-test your own numbers before deciding:

The calculator will show you exactly what you are trading.

What to Sit With Before You Decide

Before landing on an age, it helps to separate the moment’s financial stress from the actual math of the decision.

1. Claiming early is sometimes the right answer. Serious health issues, no bridge income, or genuine hardship can make 62 the correct choice. The point is to make sure you are actively choosing it, not defaulting to it because groceries feel expensive this quarter.
2. Look for a bridge before locking in the floor. Part-time income, a modest withdrawal from savings, or trimming a fixed cost like insurance or a vehicle can buy a year or two of delay. Each year waited is worth real money, permanently.

Walmart’s price cuts will help at the register this month. They do nothing to change the math of a Social Security claim locked in decades from now. One is likely a temporary discount. The other is permanent.

Every household is different, and small details, a pension, a spouse’s earnings record, a health diagnosis, can flip the answer. The decision worth making slowly is the one you cannot take back.

The post Walmart Is Slashing Prices, but the Cost-of-Living Squeeze Still Has Retirees Claiming Social Security Too Soon. appeared first on 24/7 Wall St..

A sharp sector rotation knocked down some of the market’s steadiest names, and Jim Cramer told CNBC viewers this week that the resulting dislocations are exactly the kind of setup patient investors should welcome. On the July 6 episode of Mad Money, Cramer framed the pullback this way: “These rotations create dislocations that seem to come out of nowhere. And sometimes those dislocations can give you incredible opportunities to high quality companies at a discount that shouldn’t even exist. And it wouldn’t if it weren’t for the rotation.”

Cramer named three specific dip-buy candidates on the following night’s show.

Walmart: Fuel Fears Fade as the Stock Slides

On the July 7 Mad Money, Cramer said “Walmart’s down nearly 18% from its recent highs. I think you’re getting an incredible buying opportunity here because the stock’s been getting pummeled right as Walmart’s biggest worries have started to fade away.” His thesis centers on gasoline prices: “Six weeks ago, everybody was terrified that Walmart and many other retailers would be laid to waste in a world where consumers had to spend fortunes at the pump. That world is gone, people.”

Walmart (NYSE:WMT) trades around $113, off more than 6% over the past month against a 52-week high of $135.16. The fundamentals came through clearly in the Q1 FY27 report: revenue of $175.68 billion grew 6.1% year over year, global eCommerce jumped 26%, and Walmart Connect ad revenue rose 44% excluding VIZIO. Management reaffirmed full-year adjusted EPS guidance of $2.75 to $2.85 and authorized a fresh $30 billion share repurchase program in February. The company’s next earnings release is scheduled for August 20, 2026.

Johnson & Johnson: A Pure-Play Pharma Cramer Says Was Sold by Mistake

Cramer’s July 6 pitch on Johnson & Johnson (NYSE:JNJ): “Johnson & Johnson is now a pure-play pharma business with no consumer exposure. It already spun off its over-the-counter business and it’s parting with Orthopedics. Even though they’re being taken down by mistake, that’s why I think you have to pounce.”

Since Cramer’s call, Johnson & Johnson has reported Q2 2026 results that validated his bullish read. Quarterly revenue rose 6.6% to $25.3 billion, adjusted EPS came in at $2.90, and management raised full-year adjusted EPS guidance to a midpoint of $11.68 — up from the prior range of $11.45 to $11.65. The company is now tracking toward $100 billion in annual revenue for the first time in its 140-year history. Key growth drivers in Innovative Medicine include oncology franchises such as DARZALEX and CARVYKTI, as well as TREMFYA, which crossed $2 billion in quarterly sales for the first time. On the Q1 2026 call, the board raised the quarterly dividend 3.1% to $1.34 per share, extending a 64-year streak of consecutive annual increases. Forward P/E stands at roughly 21x on updated guidance.

PepsiCo: A 4% Yield After a Mixed Earnings Report

On the same July 6 show, Cramer said of PepsiCo (NASDAQ:PEP): “PepsiCo dropped nearly a buck, sinking to a level where it sports a dividend yield north of 4%. I think the rotation has given you a terrific place to start a position ahead of Thursday’s report.”

Earnings are now out. PepsiCo’s Q2 2026 results were mixed: revenue of $24.18 billion rose 6.4% year over year and topped Wall Street’s estimate of roughly $23.95 billion, but adjusted EPS of $2.20 fell just short of the $2.21 consensus. Shares fell roughly 3% on the print. The headline shortfall masked genuinely encouraging operating trends: international divisions posted organic volume gains across snacks and beverages, global food volume grew 3% and beverage volume grew 2%, and management reaffirmed full-year guidance calling for organic revenue growth of 2% to 4% and core constant-currency EPS growth of 4% to 6%. North American beverages remained the weak spot, with volume declining 4% in the quarter. After the 4% annualized dividend increase that took effect with the June 2026 payment, the quarterly rate stands at $1.48 per share, marking PepsiCo’s 54th consecutive annual raise and cementing its status as a Dividend King. For income-focused readers, our team has flagged similar setups in the 10 Dividend Kings to Buy Now and Hold Forever report.

A Selective, Stock-Specific Call

Cramer has been cautious in other market pockets this summer, so these three ideas should be read as targeted, stock-specific dip-buying calls tied to a rotation. They are his opinions delivered on Mad Money and reported here for context, not endorsed as recommendations. Readers should weigh valuation, position sizing, and their own timelines before acting.

The Throughline

The connective thread across Cramer’s three picks is defensive quality with rising cash returns. Walmart compounds retail dominance with a fast-growing, high-margin advertising business. Johnson & Johnson is leaning hard into a pharma pipeline that has now delivered back-to-back quarterly beats with raised guidance. PepsiCo defends a yield near 4% while international volumes accelerate and U.S. foods show early signs of recovery. Whether the rotation is truly a gift will show up in the earnings reports ahead and in how quickly the market rewards fundamentals over sentiment.

Editor’s note: This update adds Johnson & Johnson’s Q2 2026 earnings (revenue up 6.6% to $25.3 billion, adjusted EPS $2.90, raised full-year guidance to a midpoint of $11.68) and PepsiCo’s Q2 2026 results (revenue $24.18 billion, adjusted EPS $2.20, full-year guidance reaffirmed), and revises the JNJ forward P/E from 23x to 21x to reflect the updated consensus. The PepsiCo section heading has been updated to reflect that the quarterly report is now public.

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Two Icons, One Surprising Winner

Caterpillar (NYSE:CAT) spent much of the past decade being labeled a cyclical industrial bellwether tied to construction, mining, and commodity prices. That story has changed. The company is now riding an unexpected tailwind: AI data center power demand. In Q1 2026, Power Generation revenue within Energy & Transportation jumped 41%. Construction Industries sales rose 38%, with segment margins expanding to 21.4%. CEO Joe Creed called out “a record backlog” even as $1.03 billion in tariff-related costs compressed Q4 2025 operating margin to 13.9%.

Walmart (NYSE:WMT) has quietly transformed from big-box retailer to omnichannel platform. In Q1 FY27, global eCommerce grew 26% and now makes up 23% of net sales, while global advertising jumped 37%. U.S. comps rose 4.1% excluding fuel, with the strongest share gains coming from upper-income households. John Furner recently took the CEO reins from Doug McMillon.

What $1,000 Turned Into

A $1,000 stake in Caterpillar a decade ago would be worth roughly fifteen times that today, far outpacing both Walmart and the broader index. Most of that outperformance is recent: the stock is up 64.1% year-to-date on the AI power thesis. Walmart’s story is steadier. It beat the S&P 500 at five and 10 years but is trailing the benchmark over the past year as its 39 P/E multiple digests reality.

Where Fresh Money Fits Best

Caterpillar looks compelling for investors who believe data center capital spending keeps compounding and gas turbine backlogs stretch into 2028. The bear case is that this is a cyclical play dressed up as a secular growth story. A 9.0% drop in the past week hints at how quickly sentiment can change. Tariff costs are real. After the share price more than doubled in 12 months, caution is warranted.

Walmart appeals to those who want a defensive compounder with real growth optionality in ads and marketplace. The bear case is valuation. Paying 39x earnings for a retailer growing sales in the mid-single digits leaves little margin for error. Shares would look more attractive on any pullback toward the low $100s. At current levels, patience is the play.

Between the two, Walmart is the steadier long-term compounder. Caterpillar is the higher-volatility growth story. That difference matters.

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On the June 27 episode of the Animal Spirits podcast, Michael Batnick and Paul Schroeder of Invesco spent a segment on something that should annoy anyone who thinks they understand the NASDAQ 100. As of that date, Micron (NASDAQ:MU) carried a 5.7% weighting in QQQ (NASDAQ:QQQ) while Meta (NASDAQ:META) sat at just 2.6%, even though Meta’s total market cap was far larger. Batnick called it a head-scratcher.

Schroeder had a clean answer. The NASDAQ 100 uses a free-float-adjusted methodology, not raw market cap, and Mark Zuckerberg’s stake reduces what actually counts.

The Micron Over Meta Head-Scratcher

Micron Technology is having a year that forces indexers to notice. Fiscal Q3 revenue hit $41.46 billion, up 345.7% year over year, beating consensus by 17.6%. Non-GAAP EPS of $25.11 ran past the $20.28 estimate. Guidance for Q4 came in at $50 billion in revenue with gross margin around 86%. Shares are up 666% year to date and 707% over the last twelve months. Market cap sits around $1.04 trillion.

Meta Platforms is the bigger company. Market cap of roughly $1.33 trillion, trailing twelve month revenue near $215 billion, and Q1 EPS that beat consensus by 56.79%. Its QQQ weight is less than half of Micron’s. If you assumed the index tracked raw market cap, this is nonsense. So the methodology is doing something.

What Free Float Actually Means

Free float is the share count actually available for outside investors to trade. Founder holdings, family trusts, and long-locked insider positions do not count toward the calculation. Schroeder told Batnick that Meta’s free float sits around 80 to 85%. Zuckerberg’s Class B super-voting stake plus other insider holdings shave what the NASDAQ committee counts when it calculates the weighting. Meta insider ownership sits at 10.2% of shares outstanding.

Meanwhile, Micron insiders own about 0.253% of the company, so the whole float is essentially available for the index to count. That is why a smaller company can outweigh a giant, and it is why Micron’s rerating flows straight into index weight without getting sanded down.

The Walmart Parallel Nobody Talks About

Batnick reached for Walmart (NYSE:WMT) as the cleaner illustration. The Walton family owns so much of Walmart that its full market cap is not reflected in index weightings. Walmart is not in the NASDAQ 100, but the same free-float mechanic applies wherever it is used.

Alpha Vantage reports Walmart insider ownership at 44.85%, with only about 4.37 billion shares in the true float out of roughly 7.96 billion outstanding. Walmart’s $880 billion market cap is real. For weighting purposes, only about half of it counts.

What You Actually Own When You Buy QQQ

Schroeder made a second point worth chewing on. Quarterly rebalances re-rank existing constituents. They do not add or drop names. QQQ and QQQM turn over roughly 6 to 8% annually, and most of that churn comes from the annual reconstitution rather than the intra-year rebalances. The weight gap you see today is roughly the weight gap you will live with for a while.

Which brings up the practical point most retail investors miss. QQQ is often described as a market-cap index, but it uses a modified market-cap methodology with free-float adjustments and rebalancing caps applied by the index committee. Apple (NASDAQ:AAPL), with a market cap around $4.62 trillion and negligible insider ownership, sees its weight track its size closely.

Meta does not get that treatment because Zuckerberg does not sell. Micron gets the opposite treatment, with a nearly-100% tradeable float amplifying its rally into a weighting that dwarfs a company worth hundreds of billions more.

The takeaway is uncomfortable if you like tidy stories. Judging your QQQ exposure by market cap alone will mislead you. The full mechanics live in the Micron 8-K and its peers, and in the index prospectus itself. Weightings change every quarter. Whatever the current Micron to Meta gap looks like when you check tomorrow, the mechanism producing it will still be there.

The post Why Micron Outweighs Meta 2-to-1 in the Nasdaq 100, Even Though Meta Is Way Bigger appeared first on 24/7 Wall St..

Walmart (NYSE: WMT) announced it is dropping prices on thousands of items it sells in its stores. It says the plan is to save Americans money as the nation moves through the summer. One notable example of the decision is that it has dropped the price of Coca-Cola, Diet Coke and Coca-Cola Zero Sugar 24-packs to $9.97 from $14.97. That is a 33% markdown.

The Walmart announcement of the decision said, “From weekly grocery trips and backyard cookouts to vacations and summer fun, Walmart is helping customers save on the products they need all season long.” In other words, it is doing American consumers a favor.

What is not clear is why and how Walmart is doing this. As a massive retailer, it can probably get discounts from suppliers. Nevertheless, Walmart works on small margins. In the most recently reported quarter, Walmart U.S. had revenue of $117.2 billion. Operating income was $5.9 billion, or 5%.

There is speculation that President Trump has pressured Walmart to cut prices to reduce inflation in America. However, there is no proof that this is the case. Trump did post on social media that the decision was a “huge deal.”

While the decision certainly squeezes Walmart’s margins, it may help its market share, particularly if its rivals do not match the plan. Walmart is by far the largest bricks-and-mortar retailer in the nation. Walmart claims that its “5,200 stores and clubs are within 10 miles of approximately 90% of the population.”

Walmart has long claimed one reason people should shop at its stores is “Everyday Low Price.” Based on store traffic, many Americans seem to believe that is true.” Less clear is why the retailer made the new pricing decision.

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With the third quarter underway, most of the top firms we cover on Wall Street are releasing their top stock ideas for the next three months. BofA Securities, which we have covered for years, always has 10 new top picks at the start of every quarter. The 10 stocks, nine of which are Buy-rated, and one is Underperform-rated and ostensibly a short sale idea, are out, and we decided to screen the list for the top growth and dividend ideas. With the first full trading week of the third quarter upon us, many investors are seeking safer ideas amid a sustained market rally, even as major indices remain near all-time highs. We have identified four top Bank of America Q3 2026 ideas with significant upside potential and, in some cases, substantial, reliable dividends.

The BofA team remains positive on the stock market and the broader backdrop, as noted in the report:

BofA’s RIC Outlook points to a largely bullish backdrop for the U.S. economy and global equities, with indicators confirming that the “new industrial cycle” remains intact and that earnings momentum is strengthening. The Global Earnings Revision Ratio has improved to a six‑month high, with particularly strong readings in the U.S. and broad-based upgrades across regions, while the Global Wave of macro data is rising in tandem with the earnings cycle—historically a supportive signal for equity returns. Although valuations and positioning suggest markets may be somewhat overheated in the near term, we think any summer pullback could be a potential buying opportunity, especially in real assets, credit, and value-oriented areas.

Why do we cover BofA Securities’ top quarterly ideas?

BofA Securities is one of the top firms on Wall Street, and we have covered the company’s curated stock lists for years. These are their absolute best ideas across several categories, including the Endeavor List, covering small-cap stocks; the Value 10 list, featuring the top analysts’ best value ideas; and the Growth 10 List, a quantitatively generated portfolio of 10 stocks with high expected earnings growth.

Ford

This American automotive corporation was founded in 1903 by Henry Ford and 11 associate investors. This legacy carmaker pays shareholders a robust 4.3% dividend yield. Ford (NYSE: F) develops, delivers, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide. The BofA team said this about the stock:

We expect continued upward estimate revisions for Ford given: 1) Ford’s primary North America market is better positioned compared to Europe/China given a protectionist trade agenda (no Chinese EV disruption), a favorable regulatory environment given the roll off of emission standards programs that allows Ford to produce its highest margin accretive ICE vehicles, and resilient demand despite higher gas prices, 2) mix benefit from shift to higher margin trims at F Blue, including off-road & V8 trims, 3) Novelis recovery progressing better than expected, 4) outsized growth in F’s high margin software & services business, 5) support from Ford’s new battery energy storage business & the scaling of its new EV platform with the launch of an affordable pickup next year.

It operates through five segments:

• Ford Blue
• Ford Model e
• Ford Pro
• Ford Next
• Ford Credit

The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors, dealers, and dealerships to commercial fleet customers, daily rental car companies, and governments. It also engages in vehicle-related financing and leasing activities through automotive dealers.

In addition, the company provides retail installment sale contracts for:

• New and used vehicles
• Directly finances leases for new cars to retail and commercial customers, including leasing companies, government entities, daily rental companies, and fleet customers

Furthermore, it offers wholesale loans to dealers to finance the purchase of vehicle inventory, as well as loans to fund working capital, enhance dealership facilities, purchase dealership real estate, and support other dealer vehicle programs.

The Bank of America price target is $20.

IBM

International Business Machines (NYSE: IBM), nicknamed Big Blue, is an American multinational technology company. The legacy blue-chip tech giant offers conservative investors a safer way to play the sector with a 2.35% dividend, and with the shares flat this year, some big upside is possible. IBM provides integrated solutions and services worldwide. BofA noted this about the legacy tech giant when discussing the push to quantum computing:

Quantum should become a more visible part of the IBM story as interest increases (given recent pure-play Quantum IPOs). IBM reiterated in F1Q that it remains on track to deliver its first large-scale fault-tolerant quantum computer by 2029 and noted that partners could achieve the first examples of quantum advantage this year using IBM hardware. More recently, IBM and the U.S. Department of Commerce announced an LOI to create Anderon, a standalone U.S. quantum chip foundry supported by a proposed $1bn CHIPS award and a $1bn IBM cash contribution, followed by IBM announcing plans to invest more than $10bn in quantum over the next five years. We view these announcements as material for IBM’s quantum leadership to receive greater attention and as a catalyst for IBM’s quantum business to provide optionality for the stock.

The company operates through four segments. The Software segment offers a hybrid cloud and AI platform that allows clients to realize their digital and AI transformations across the applications, data, and environments they operate. IBM has partnered with Amazon Web Services (AWS) to allow users to access Watsonx AI features and its data platform. IBM also partnered with Palo Alto Networks, allowing the cybersecurity company to acquire IBM’s QRadar Software as a Service (SaaS) assets.

The Consulting segment focuses on integrating skills across strategy, experience, technology, and operations by domain and industry, while the Infrastructure segment provides on-premises and cloud-based server and storage solutions, as well as life-cycle services, for hybrid cloud infrastructure deployments. And the Financing segment offers client and commercial financing that facilitates IBM clients’ acquisition of hardware, software, and services.

The company has a strategic partnership with various companies, including:

• Hyperscalers
• Service providers
• Global system integrators
• Software and hardware vendors, including Adobe, Amazon Web Services, Microsoft, Oracle, Salesforce, Samsung Electronics, SAP, and others

BofA Securities has set a $315 target price.

Visa

The credit card giant was recently removed from Berkshire Hathaway’s portfolio, but the BofA team remains positive on the shares. Visa (NYSE: V) is a global payments technology company that pays a small 0.7% dividend. It facilitates global commerce and money movement across more than 200 countries and territories among consumers, merchants, financial institutions, and government entities through technology.

The BofA team had these thoughts on the shares:

Visa is our top way to own the secular shift from cash to electronic payments: a durable, double-digit revenue/teens-EPS compounder with a wide debit and credit moat, a fast-growing value-added services engine (~30% of net revenue), and $33B of buyback firepower. It trades 3x below its five-year average forward PE, continuing to discount regulatory and disintermediation overhangs that we view as overstated. Visa remains a high-quality franchise at a defensive multiple, poised to be a catalyst-rich window.

Its Payment Services segment provides transaction processing services (primarily authorization, clearing, and settlement) to its financial institution and merchant clients through VisaNet, its proprietary advanced transaction processing network.

The company offers a range of Visa-branded payment products that its clients, including nearly 14,500 financial institutions, use to develop and offer payment solutions or services, including credit, debit, prepaid, and cash access programs for individual, business, and government account holders. It also provides value-added services to its clients, including issuing solutions, acceptance solutions, risk and identity solutions, open banking solutions, and advisory services.

The BofA Securities target price is $410.

Walmart

This company, founded in 1945, is the world’s largest retailer, with over 10,000 stores offering groceries, health products, and general merchandise. Walmart (NYSE: WMT) also has a strong e-commerce platform and a 0.88% dividend. BofA said this about the technology-powered omnichannel retailer:

We remain convinced that the current backdrop, with strength from the upper-income consumer and some caution from the value-seeking consumer, is conducive to Walmart accelerating share gains by leading with price and speed. WMT has significant competitive advantages to invest and gain share due to 1) its ability to tap into high-growth, margin-rich businesses like advertising and membership to help fund pricing investments, and 2) having best-in-class delivery speeds. If middle- and lower-income consumers hold up better than expected, especially as gas prices start to move lower, this would likely strengthen sales trends across Walmart US and Sam’s Club. At 36x P/E (F28), we think the stock could start to rerate higher as the market gets confidence that WMT can return to a beat/raise cycle starting next quarter.

Walmart operates retail and wholesale stores and clubs, as well as e-commerce websites and mobile applications, throughout the United States, Africa, Canada, Central America, Chile, China, India, and Mexico. It operates in three reportable segments.

The Walmart U.S. segment includes the company’s mass merchandising concept in the U.S., as well as eCommerce, which provides omni-channel initiatives and other specific business offerings such as advertising services.

The Walmart International segment consists of the company’s operations outside of the U.S., as well as eCommerce and omni-channel initiatives.

The Sam’s Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.

Bank of America has a $140 target price.

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Walmart (NYSE:WMT) has quietly built one of the most convincing defensive setups in the market. With consumer sentiment at recessionary levels and grocery spending still climbing, the world’s largest retailer is executing across omnichannel, advertising, and membership at the same time. Our proprietary model sees room for the stock to keep grinding higher over the next year.

The 24/7 Wall St. price target for Walmart is $133.42, implying 17.8% upside from the current $113.26 price. Our recommendation is buy, with a high confidence level of 90%.

24/7 Wall St. Price Target Summary

A Rough Week Meets a Strong Quarter

Walmart shares slid 5.16% over the past week and are down 2.15% over the past month, leaving the stock up just 2.07% year to date after a stretched run. On longer horizons, WMT is up 16.8% over one year and 159.93% over five. Shares sit roughly 3% below the 52-week high of $135.16.

The Q1 FY27 print reinforced the bull thesis. Revenue of $175.684 billion grew 6.08% YoY, beating expectations, while adjusted EPS of $0.66 edged consensus.

Global eCommerce jumped 26%, marketplace sales climbed nearly 50% (the best in 10 quarters), and global advertising rose 37%. CEO John Furner called it “a disciplined approach that’s helping us grow the business and strengthen returns.”

The Case for $146+

Bulls have a lot to work with. Of 44 covering analysts, 9 rate WMT Strong Buy and 30 rate it Buy, with only one sell.

Higher-margin businesses are compounding: FY26 global advertising ran roughly $6.4 billion, membership fee revenue rose 17.4% globally, and Walmart Connect grew 44% ex-VIZIO. Automation of roughly 50% of eCommerce fulfillment volume plus a potential PhonePe IPO offer additional catalysts. Our bull scenario points to $146.94, a 29.74% return.

The Risks Worth Watching

Bears can point to real headwinds. Free cash flow turned negative at -$1.9 billion in Q1 FY27 as capex surged 34.06%, ROI slipped 40 bps to 14.9%, and global inventory grew 8.9%. Insiders have been net sellers across 58 recent transactions.

Maximum Fair Pricing legislation created a 700 bps headwind in Health & Wellness, and IEEPA tariff uncertainty lingers. Counterbalancing that: the FCF drop reflects deliberate investment in automation and delivery capacity, and inventory build supports Walmart’s expedited under-3-hour delivery expansion. The bear scenario still yields $118.63, a 4.74% return.

Walmart Price Prediction 2026-2030

The 24/7 Wall St. price target of $133.42 and buy rating rest on 90% confidence, and the setup fits the macro: with University of Michigan consumer sentiment at 44.8, well below recessionary thresholds, while food spending pushed to $1,566.8 billion in May 2026, Walmart’s value positioning is exactly where dollars are flowing.

The bull case rests on defensive exposure with growth optionality from advertising and membership. The bear case hinges on FCF pressure and Health & Wellness legislation compressing margins faster than higher-margin businesses can offset.

Looking further ahead, here is where our model projects Walmart could trade, assuming current growth trajectories hold.

These projections assume Walmart keeps executing on automation, advertising, and membership. Meaningful deviation could come from tariff shocks, Health & Wellness pricing rules, or a sharper-than-expected recovery in consumer discretionary spending.

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Walmart’s agentic shopping push with Google’s Gemini has flipped a long-simmering thesis into a live catalyst: AI agents that browse, compare, and check out on behalf of consumers are moving from concept to production at the largest retailer on earth. That reroutes value across the entire e-commerce stack, from storefront platforms to payments rails to the warehouses and trucks that turn a chatbot cart into a doorstep delivery.

To rank the top beneficiaries, we weighted five factors: e-commerce growth, agentic AI readiness, marketplace or platform positioning, financial momentum, and direct linkage to the Walmart-Google flywheel. The beneficiary set includes such names as Target, Wayfair, UPS, Mastercard, and PayPal, but the five below are closest to the action.

5. FedEx

FedEx (NYSE:FDX) is the parcel backbone for packages agentic carts will generate. Q4 FY26 revenue hit $25.01 billion (+12.5% year on year) with adjusted EPS of $6.31, the fourth consecutive beat. U.S. Priority Package yield rose 10%, and management guided calendar 2026 to roughly 11% revenue growth. Shares are up 68.1% year to date through July 1. Yield discipline and the June 1, 2026, Freight spin-off leave a leaner parcel business ready to price agentic-driven volume.

4. Etsy

Etsy (NASDAQ:ETSY) is the most direct pure-play agentic-commerce partner. The marketplace has plugged into OpenAI’s shopping framework and cites partnerships with OpenAI, Microsoft, and Google as incremental traffic drivers. Q1 FY26 GMS grew 5.5% to $2.50 billion, active buyers grew sequentially for the first time in two years, and take rate expanded 180 bps to 25.7%. CEO Kruti Patel Goyal said, “As technology continues to evolve, particularly with the rise of AI, we believe those qualities become more important, not less.” Shares are up 31.4% year to date, with analysts carrying a $72.71 target.

3. Symbotic

Symbotic (NASDAQ:SYM) is the purest picks-and-shovels play on Walmart’s fulfillment buildout. Q2 FY26 revenue rose 23.1% to $676.48 million, adjusted EBITDA more than doubled to $77.75 million, and operational systems reached 52 (up from 37). The contracted backlog sits near $22.7 billion, anchored by Walmart and buttressed by the SoftBank Exol JV worth roughly $11 billion. Symbotic acquired Walmart’s Advanced Systems and Robotics business, deepening the linkage. Shares are down 24.4% year to date, which arguably prices in the GAAP EPS miss while leaving room for re-rating if agentic order flow lifts throughput.

2. Shopify

Shopify (NASDAQ:SHOP) is the merchant-side AI backbone for millions of storefronts an agent will transact against. Q1 FY26 revenue jumped 34.3% to $3.17 billion, GMV reached $100.74 billion (+35%), and free cash flow was $476 million at a 15% margin. Merchant Solutions revenue grew 39%, and Shopify is layering AI commerce intelligence, agentic checkout tooling, and merchant-facing AI directly into its stack. Shares trade at a rich 120 times earnings and are down 24.44% year to date, giving forward-looking investors a cheaper entry into the agentic distribution layer than a year ago.

1. Walmart

Walmart (NYSE:WMT) is the story. Q1 FY27 revenue hit $175.68 billion (+6.1% year on year), global e-commerce grew 26% and now represents 23% of net sales, marketplace sales rose nearly 50%, and Walmart Connect advertising grew 44% ex-VIZIO. Store-fulfilled delivery is up 45%, with expedited orders under three hours accounting for roughly 36% of store-fulfilled volume. CEO John Furner said Walmart is “adopting innovative technologies, driving productivity through automation, and growing higher-margin commerce solutions.” A $30 billion repurchase authorization underpins the investment case. Analysts carry a $138.59 target versus a current price near $111.60. The Google Gemini agentic shopping tie-in gives Walmart a distribution moat few competitors can replicate: physical stores, a booming marketplace, its own ad platform, robotics via Symbotic, and an AI front door.

The Bottom Line

Walmart owns the anchor deal, Shopify powers the merchant layer, Symbotic automates the warehouses, Etsy is already inside the ChatGPT shopping surface, and FedEx moves what agents buy. Consumer sentiment is soft (the University of Michigan index printed 44.8 in May 2026, well into recessionary territory), yet retail sales still hit a 12-month high of $763.7 billion. The clear risk: agentic commerce adoption is early and unproven, and any of these stocks could see the narrative outrun the numbers before consumers meaningfully shift to AI-mediated checkout.

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The Vanguard Value ETF (NYSEARCA:VTV) has turned into one of the best large-cap stories of 2026, trading near $218 with a 16% year-to-date gain and a 27% advance over the past year. That run rests on a narrow set of legs: a healthcare snapback led by UnitedHealth, a financial-sector grind led by JPMorgan, and energy strength that is now wobbling. With a 0.03% expense ratio tracking the CRSP US Large Cap Value Index, VTV is the cheapest way most investors get this exposure, but the next 12 months will hinge on two specific variables rather than the broad value-versus-growth debate.

The Fund’s Current Stance

VTV’s index leans heavily into financials, healthcare, industrials, consumer staples, and energy. The portfolio’s top holdings reflect that tilt: JPMorgan Chase (NYSE:JPM), Berkshire Hathaway (NYSE:BRK-B), Exxon Mobil (NYSE:XOM), UnitedHealth Group (NYSE:UNH), and other staples leaders. The dispersion inside that group is wide. UnitedHealth is up 31% year-to-date, Exxon is up about 15% despite a 8% drop in the past month, and Berkshire is down roughly 1%. VTV’s performance has not been broad-based, which sets up the first risk.

The Macro Factor That Matters Most: The Fed’s Inflation Read

The single most important macro variable for VTV over the next 12 months is the path of Core PCE inflation, because it determines whether the Fed keeps the yield curve steep enough for banks to print money. The latest Core PCE reading sits at the 92nd percentile of its 12-month range, and the index has climbed every month for a year. The 10-year Treasury has eased to 4.40% from a May peak of 4.67%.

Watch the monthly Core PCE release from the Bureau of Economic Analysis on the last business day of each month, plus the CME FedWatch tool for rate expectations. If Core PCE prints above 2.5%, the Fed stays restrictive, the curve stays steep, and JPM’s net interest income holds up. JPM’s Q1 markets revenue hit a record $11.6 billion and IB fees rose 28%, results that depend on the current rate backdrop. A surprise drop in Core PCE toward 2% would flatten the curve and pressure the financial sector’s earnings power.

The Fund-Specific Factor: Healthcare and Financials Are Carrying Everything

VTV’s CRSP US Large Cap Value Index puts financials and healthcare together at roughly 40% of the portfolio. Right now both legs lean on single names that have ripped. UnitedHealth has rebounded 12% in the past month alone after raising its FY2026 adjusted EPS guide to above $18.25, but carries active DOJ legal exposure. JPM trades at 15x trailing earnings against an analyst target of about $343, leaving little margin if Q2 results disappoint.

The catalyst to circle: JPM’s Q2 earnings release in mid-July. Polymarket assigns a 97% probability that Q2 investment banking fees clear $2.55 billion, but only a 45% probability they top $3.00 billion. A miss on the upper threshold would call the recent rally into question. Because JPM is VTV’s largest single position, any reset reads directly into NAV. Track the JPM release on the company’s investor relations site, and watch UNH’s Q2 medical cost ratio. A move back above 84% would unwind the rebound thesis fast.

The Setup From Here

If Core PCE stays above 2.5% through the summer, the yield curve dynamic keeps working for VTV’s financial weighting, and the fund’s 27% one-year return has a credible second act. The signal to flag is a JPM Q2 report that misses on markets revenue or IB fees, paired with any Core PCE print under 2.3%. That combination would compress the two engines that have driven VTV in 2026, and consumer sentiment at 44.8, near-recessionary territory, leaves little cushion from the staples and consumer names underneath.

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Walmart (NYSE: WMT) and Costco (NASDAQ: COST) just delivered earnings that show two very different retail playbooks working at once.

Walmart leaned on advertising, marketplace, and faster delivery to expand its empire. Costco kept doing what it does best: opening clubs, renewing members, and pushing Kirkland deeper into the cart. Both reports beat the Street, but the businesses behind the beats look nothing alike.

Ads and Marketplace Carry Walmart. Memberships Carry Costco.

Walmart’s Q1 FY27 revenue hit $175.684 billion, up 6.08% year over year, with adjusted EPS of $0.66. The real story sits underneath. Global eCommerce climbed 26%, marketplace sales jumped nearly 50% (the best in 10 quarters), and global advertising grew 37%.

New CEO John Furner pointed to “higher-margin commerce solutions” as the strategy, and the numbers back him up. Upper-income shoppers keep showing up, which is unusual for a discount banner.

Costco’s Q3 FY26 looked equally healthy but for different reasons. Revenue reached $70.527 billion, up 11.58%, with EPS of $4.93. Comparable sales rose 9.8% reported, and digitally enabled comps were up 21.5%.

Membership fees, the engine that funds everything, grew 10.7% to $1.373 billion, with a worldwide renewal rate of 89.7%. Executive members now drive 75.0% of net sales. That is a moat.

Wider Net vs. Deeper Loyalty

Walmart is widening the net. Furner is layering ad tech, VIZIO, Sam’s Club, and Flipkart onto a base where Walmart International grew 18% and China popped 22.3%.

Costco is going deeper. Roughly 12 new warehouses are planned for the rest of FY2026, fresh Kirkland items keep landing, and prices on select Kirkland SKUs are actually coming down. One company sells a platform to brands. The other sells trust to households.

Margins and Tariffs Will Decide the Next Earnings Report

I will watch whether Walmart can absorb its 700 bps Health & Wellness headwind from Maximum Fair Pricing without denting the FY27 EPS range of $2.75 to $2.85. Free cash flow already swung to negative $1.946 billion on heavy capex, which is fine if the automation pays back.

For Costco, the question is simpler: can traffic keep growing at 2.4% with tariffs squeezing import categories?

Why I Lean Costco for Quality, Walmart for Optionality

On pure business quality, Costco screens stronger. The membership renewal rate barely moves, and that recurring fee model is the closest thing in retail to a software subscription. You are paying up for it, though. Shares trade at a 48 P/E after a YTD gain of 11.77%, and the stock is down 6.53% over the past month, which tells me others share the valuation worry.

Walmart looks like the better optionality bet. The ads and marketplace flywheel is still early, the $30 billion buyback gives a floor, and the stock’s 22.44% one-year gain reflects real operating momentum.

For a turnaround-style investor it is less interesting, but for someone who wants a defensive name with a hidden ad business, I think Walmart fits. Tariff clarity is the key variable that could re-rate either name from here.

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It really doesn’t matter who made the statement if he or she really, really knows what they are talking about. Richard Liu, founder and chair of JD.com, said that “sooner or later” robots would replace 700,000 delivery workers in China. Early experimental versions of this business model are already in place in China, the FT reported.

Who supports this point of view? To a large extent, Elon Musk and Jeff Bezos. Job destruction by the next generation of tech will not be limited to AI software. It will be advanced robots powered by AI.

Just nine months ago, The New York Times ran an extensive exposé on Amazon’s plans to avoid increasing its workforce by automating about 75% of its operations. Amazon (NASDAQ: AMZN) expects to sell about twice as many products as it does now by 2033. Robotic automation would allow for much of the growth. “That would translate to more than 600,000 people whom Amazon didn’t need to hire,: the Times reported. Another conclusion of the analysis is that Walmart (NYSE: WMT) and UPS (NYSE: UPS) will be able to do the same. If the process works, add countless numbers of smaller companies that can make similar business decisions,

Elon Musk says he can build billions of his Optimus robots, which will handle most human tasks. He has even stopped producing his Model S and Model X vehicles so he can use the factory that builds them to manufacture the first generation of Optimus. NVIDIA (NASDAQ: NVDA) CEO Jensen Huang recently added, “Physical AI has arrived — every industrial company will become a robotics company.”

What is at stake? Around the world, certainly tens of millions of jobs, if these three CEOs (or chairman) are close to correct. It raises, once again, how the world handles this level of unemployment.

The ability to replace factory and delivery workers is only a part of AI job destruction. White-collar workers, particularly at the entry level, have found out that much of what they would do can already be done by AI. The same is true with software programmers. Companies that include Block (NYSE: XYZ) have already laid off thousands of workers because their jobs can be done more cheaply and efficiently by AI applications.

Liu’s comment is one more that supports the idea that AI will cause an employment apocalypse.

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The scenario looks like this: a 63-year-old has built up $850,000 over a working lifetime, watched 2022 and a few scary headlines since, and parked almost all of it in CDs, money market funds, and short Treasuries paying roughly 4%. That throws off about $34,000 a year in interest. It feels prudent. It is also quietly expensive.

Versions of this exact post show up weekly on Reddit’s r/retirement and r/Bogleheads, and Clark Howard regularly tells callers the same thing he told one in a 2018 episode: a sensible retirement core is “60% stocks, 40% bonds“ in a low-cost balanced index, not 100% cash. The fear is understandable. The math is unforgiving.

The situation in five lines

• Age: 63, likely a 25 to 30 year retirement horizon.
• Portfolio: $850,000, nearly all in CDs, cash, and short bonds.
• Current yield: roughly 4%, producing about $34,000 in pretax interest.
• Core risk: inflation and longevity over a 25-to-30 year horizon.
• What is at stake: purchasing power for the next three decades.

Why “safe” isn’t safe at 63

The Fed funds upper bound sits at almost 4%, down from 4.5% a year ago after three consecutive 25 basis point cuts. The 10-year Treasury yields almost 5%. That looks fine on a statement. It looks worse next to CPI, which sits at 332.4 and has climbed steadily over the past year.

Long-run capital markets assumptions from firms like Vanguard and Morningstar generally put a balanced 60/40 portfolio several percentage points ahead of cash over a multi-decade horizon. Apply a conservative 4 percentage point differential to $850,000 and the implied opportunity cost is roughly $34,000 a year in forgone expected growth. That figure is an assumption, not a promise, and any real path will include drawdowns. Over 25 years, though, the gap compounds into hundreds of thousands of dollars of purchasing power.

The relevant rules in 2026 reinforce the long horizon: RMDs don’t begin until age 73 under SECURE 2.0, full Social Security retirement age is 67, and qualified dividends are taxed at 0%, 15%, or 20%, often lower than the ordinary-income rate that hits CD interest.

Three paths that actually move the needle

1. Right-size an equity sleeve. Moving even 40% to 50% of the portfolio into diversified equities reshapes the next 25 years. A low-cost dividend ETF like Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD), with an expense ratio of 0.06% and $71.6 billion in assets, has returned about 50% over five years before dividends. Pair it with individual aristocrats like Johnson & Johnson (NYSE:JNJ), which just raised its quarterly dividend to $1.34 for its 64th consecutive annual increase, and Procter & Gamble (NYSE:PG), now on its 70th straight annual hike. Walmart (NYSE:WMT) raised its 2026 dividend to $0.99 annualized and the stock is up about 175% over five years. For an investor who dislikes paying tax on dividends, Berkshire Hathaway (NYSE:BRK-B) offers equity exposure with no dividend, up about 69% over five years.
2. Run a bucket strategy. Keep two to three years of spending in cash and short Treasuries, five to seven years in intermediate bonds and TIPS (the 10-year TIPS real yield is currently about 2%, a genuine inflation hedge), and the remainder in equities. This handles sequence-of-returns risk without surrendering long-term growth.
3. Default to a balanced fund. For a retiree who will not rebalance on their own, a single 60/40 balanced index fund accomplishes most of what the first two options do with one ticker and one decision per year.

What to do this month

First, write down the actual annual spending number. If $34,000 of interest covers it with Social Security, the urgency is lower, but the inflation problem still applies; at 3% inflation, that $850,000 loses roughly half its purchasing power over 25 years. Second, move in tranches, not all at once. Shifting 5% per quarter into a diversified equity sleeve over a year removes the “I bought at the top” regret that keeps people frozen. Third, avoid the most common mistake here, which is treating any equity exposure as gambling. The real gamble, at 63, is assuming inflation will be polite for the next 30 years. It will not.

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Walmart (NYSE:WMT) is the comfort trade of 2026, hitting fresh highs on the back of a 29% one-year gain and a reputation as the retailer that always finds a way. But here’s what you should actually be watching.

The Hot Ticker Is Quietly Breaking

Walmart now trades at a trailing PE of 43 and a forward PE of 41, which is what investors used to pay for hyper-growth software. What are they getting for it? Quarterly revenue growth of 7.3% YoY, a net profit margin of 3.14%, and a dividend yield of 0.79%. The most recent quarter barely cleared the bar: revenue of $175.68B grew 6.1% YoY while adjusted EPS of $0.66 narrowly beat expectations, both rounding errors.

The real tell is underneath the headline. Free cash flow turned negative at $1.9 billion as capex surged 34% YoY to $6.68 billion. Operating cash flow fell 12.4% YoY. Return on investment slipped 40 basis points to 14.9%. And management is still flagging IEEPA tariff uncertainty as an unresolved risk. This is a mature retailer paying a growth multiple while its cash generation goes the wrong way. The PEG ratio sums it up: 4.77.

The Better Buy Is Growing Ten Times Faster

MercadoLibre (NASDAQ:MELI) is the Latin American e-commerce and fintech operator the headline-chasers are ignoring, and that is exactly the setup retirement money should want. Three reasons it belongs in the portfolio Walmart is crowding out.

1. Growth velocity that is not slowing. Q1 2026 revenue hit $8.85 billion, up 49.03% YoY, the company’s strongest growth rate since Q2 2022. Commerce grew 47% YoY; fintech grew 51% YoY. Brazil revenue grew 55% YoY in USD, Mexico 62%. Operating cash flow more than doubled to $2.08 billion, +119.81% YoY.

2. A fintech engine built for inflation. Mercado Pago’s monthly active users hit 83 million, +29% YoY, with AUM near $20 billion, +77% YoY. The credit portfolio grew 104% YoY to $6.6 billion with 2.7 million cards issued in the quarter. With over half of Mexico’s population using informal credit and Argentina credit-to-GDP at one-fifth of Brazil’s level, this is structural penetration with a long runway.

3. Valuation and insider conviction line up. MELI’s PEG ratio is 0.98 against a forward PE of 31. Director Alejandro Aguzin spent open-market dollars on 600 shares at roughly $1,655 on May 22, 2026, the kind of deliberate accumulation boards rarely do at tops. Analyst consensus sits at $2,216.96 against today’s $1,646.36, with the stock down 30.59% over the past year. That is the discount.

The Action

Walmart at 43 times earnings with shrinking cash flow is a crowded defensive trade dressed up as a growth story. MercadoLibre at 42 times trailing earnings is growing ten times faster, compounding a fintech book at triple digits, and trading well below its 52-week high of $2,645.22. For retirement investors weighing the two, the data points to a wide valuation and growth gap, with MELI trading at a discount to consensus while WMT trades at a growth multiple on decelerating cash flow.

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Walmart (NYSE:WMT) trades at $116.89, with the post-earnings pullback offering a more attractive entry into a defensive retailer whose digital flywheel keeps accelerating against a sticky inflation backdrop.

Walmart runs the world’s largest brick-and-mortar retail footprint, spanning 10,900+ stores across 19 countries and serving roughly 280 million weekly customers. It also operates Sam’s Club, Walmart International, and a fast-growing digital, advertising, and membership business that increasingly drives profit.

Shares peaked above $130 around the Q1 FY27 release, then drifted lower as investors digested a thin EPS beat, negative free cash flow, and an inventory build. The stock is down 10.14% over the past month, even as the underlying business kept compounding.

Why the Digital Flywheel Justifies the Premium

The bull case rests on mix shift. Global eCommerce grew 26% in Q1 FY27 and now represents 23% of net sales, while global advertising jumped 37% and membership fee revenue rose 17.4%. These are the highest-margin lines on the P&L, scaling on top of a U.S. comp of +4.1% ex-fuel.

Macro reinforces the setup. CPI sits at 332.4, a 12-month high, while U.S. retail sales hit $757.1B in April, also a 12-month peak. Walmart is logging its strongest share gains in five years in general merchandise, led by upper-income households trading down. Management reiterated FY27 adjusted EPS guidance of $2.75 to $2.85 and authorized a $30B buyback with $28.2B remaining.

Why a 42x Multiple Looks Stretched

The bear case starts with valuation. WMT trades at a P/E of 42 on a 3.07% net margin and a 1.60% free cash flow yield. That is a software-style multiple stapled to a low-single-digit-margin retailer.

Operational cracks emerged in Q1. Free cash flow turned negative at -$1.9 billion, capex jumped 34%, and inventory grew 8.9%. Maximum Fair Pricing legislation created a 700 bps headwind in Health & Wellness, and IEEPA tariff exposure is unquantified. Insider activity leans bearish, with the Walton Family Holdings Trust selling more than 3.8 million shares between May 22 and May 29 at prices above today’s quote.

Why Patience Has Real Appeal Here

Hold investors will note the multiple has not reset materially. Execution is solid, but the FY27 EPS guide was reiterated rather than raised, and the Q1 EPS beat was only +0.2%. A cleaner tariff outcome, a return to positive free cash flow, or a deeper multiple reset would strengthen the bull setup. The Q2 earnings report, which guides to EPS of $0.72 to $0.74, will likely settle the debate.

Where the Numbers Stand After the Drop

WMT trades at $116.89, down 10.14% over the past month and 10.9% from the filing-day close of $131.30. Over that same window, the S&P 500 rose 1.5%, leaving Walmart sharply lower versus the benchmark. Shares are still up 17.89% over the past year and 163.48% over five years.

Valuation runs rich at a P/E of 42 and P/FCF of 62, with a dividend yield of 0.81% and ROE of 22.97%. Retail sentiment is constructive, with a recent r/wallstreetbets thread titled “WMT recovery play ($14k in options)” registering a 72 bullish sentiment score.

Where the Setup Stands at $116.89

At $116.89, the setup looks constructive. The path to appreciation runs through the high-margin trio: ads up 37%, eCommerce up 26%, and membership up 17.4%. These lines grow multiples faster than the consolidated top line and structurally lift operating margin, even with headline net margin stuck near 3%. The reiterated FY27 guide and $28.2B in remaining buyback authorization provide a floor while the digital mix compounds.

The risk window is the next two quarters. A tariff escalation, a second consecutive negative FCF quarter, or an inventory build above 10% would invalidate the thesis. A clean Q2 inside the $0.72 to $0.74 range should be enough to re-rate shares back toward the prior $130 zone.

The Walton trust selling is real, but it occurred at higher prices and reflects ongoing diversification by the family office. With shares roughly 11% below their filing-day high and the operating story intact, the risk-reward at $116.89 favors patient buyers underwriting a three to five-year compounding story.

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Walmart (NYSE:WMT) fits the profile of a multi-decade compounder because the company has quietly built a high-margin digital flywheel that now compounds independently of any single store it operates.

The forever case rests on what is happening behind the storefront. Global advertising revenue rose 37% last quarter, with Walmart Connect up 44% excluding VIZIO. Membership fee revenue grew 17.4% globally, and Sam’s Club raised membership fees effective May 1, 2026. Marketplace sales climbed nearly 50%, the best showing in 10 quarters, and e-commerce now accounts for 23% of total net sales. As former CFO John David Rainey put it, advertising and membership together already represent “a quarter of our profits”. Those are software-like revenue streams attached to the largest retail customer base in the world.

Pillar One: Durability Without the Real Estate

The digital businesses inherit the moat without inheriting the cost structure. Walmart U.S. comp sales rose 4.1%, general merchandise share gains were the strongest in five years, and management noted broad share gains particularly among upper-income households. Store-fulfilled delivery grew roughly 45%, turning 4,700-plus locations into last-mile fulfillment nodes that pure-play e-commerce rivals cannot replicate. Return on equity sits at 22.97%.

Pillar Two: Compounding Through Buybacks

The dividend yield of roughly 0.80% will not pay anyone’s bills, and that is the catch. The compounding engine is the buyback. Walmart raised the annual dividend to $0.99 per share for FY27 from $0.94, authorized a new $30 billion repurchase program in February 2026 with $28.2 billion remaining, and retired 85.0 million shares for $8.1 billion across FY26. Free cash flow for the full year reached $14.92 billion, up 17.88%. Quarterly dividends have been paid without interruption for more than 25 years, surviving the 2008 financial crisis and the 2020 pandemic without a cut.

Pillar Three: Built for Every Cycle

The University of Michigan Consumer Sentiment Index sits at 49.8, approaching recessionary levels, and Walmart is gaining share anyway. Beta of 0.652 reflects how the stock behaves when markets break. Over the past decade the shares have returned 489.97%, and over five years 165.4%, through a pandemic, an inflation shock, and a rate-hiking cycle.

Where It Will Lag

In a low-inflation, high-growth bull market led by speculative technology names, a consumer staples retailer trading at 43 times trailing earnings and 39 times forward earnings will look slow. Q1 FY27 free cash flow turned negative at -$1.9 billion on capex of $6.7 billion, up 34%. That capex is funding the automation, delivery, and digital infrastructure that powers the advertising and marketplace growth in the first place. The lag is the price of the next decade of compounding.

The long-term thesis rests on compounding through buybacks and reinvested dividends rather than short-term price moves.

The post The No. 1 Reason to Buy and Hold Walmart Forever Has Virtually Nothing to Do With Its Brick-and-Mortar Stores appeared first on 24/7 Wall St..

Pre-Market Stock Futures:

Futures are trading mixed on Friday as we prepare to close out one of the craziest weeks on Wall Street this year. On a day when we saw yet another all-time high, investors rotated out of chip stocks and into healthcare and industrials after Broadcom (NASDAQ: AVGO) posted disappointing results. When the dust settled, the venerable Dow Jones Industrial Average was the big winner, trading up a stunning 1.73% to close at a new record high of 51,561, while the S&P 500, which rallied to finish the day positive, was last seen at 7,584, up 0.41%. The Russell 2000 also had a stellar day, closing the session up 1.48% at 2,936. The only index to finish the day barely lower was the tech-heavy Nasdaq, which saw some rotational selling after a tremendous run, and closed at 26,830, down 0.09%.

Treasury Bonds:

Yields were down across the entire Treasury curve as buyers returned after yields rose earlier this week. Analysts and traders cited growing optimism surrounding a potential Israel-Lebanon ceasefire as materially reducing geopolitical risk. The resulting decline in oil prices alleviated some of the mounting global inflation concerns, which in turn put downward pressure on Treasury yields and supported higher bond prices. When the final bell rang, the 30-year-long bond closed the session at 4.98%, while the benchmark 10-year note was last seen at 4.48%.

Oil and Gas:

Oil prices plunged on Thursday as hopes for an Iran deal continued to drive the energy complex. This comes despite reports that Iran’s oil exports are collapsing to a six-year low. When trading ended, Brent Crude closed at $95.18, down 2.69%, while West Texas Intermediate closed at $93.01, down 3.31%. Natural gas continued its march higher, closing up 4.14% at $3.35. 

Gold:

The precious metals had a solid day, despite published reports suggesting that China’s massive appetite for the commodity may be cooling after years of heavy accumulation. Commerzbank remains very positive, with year-end price targets of $4,800 for gold and $80 for silver. The actual closing prices for the two were $4,475, up 0.93%, and $74.05, up 1.62%, respectively.

Crypto:

24/7 Wall St. reviews dozens of analyst research reports daily to identify new investment ideas for both investors and traders. Some of these daily analyst calls cover stocks to buy. Other calls cover stocks to sell or avoid. Remember that no single analyst call should ever be used as a basis to buy or sell a stock. 

Here are some of the top Wall Street analyst upgrades, downgrades, and initiations seen on Friday, June 5, 2026. 

Upgrades:

• Broadcom (NASDAQ: AVGO) was upgraded to Buy from Hold at Erst Group, without a target price.
• Chipotle Mexican Grill (NYSE: CMG) was raised to Overweight from Neutral at JPMorgan, which trimmed the price target for the shares to $35 from $38.
• FormFactor (NASDAQ: FORM) was upgraded to Outperform from In Line at Evercore ISI, with a $155 target price objective.
• Tesla (NASDAQ: TSLA) was upgraded to Neutral from Underweight at JPMorgan, which increased the target price for the EV giant to $475 from $145.
•  Tidewater (NYSE: TDW) was upgraded to Buy from Hold at Fearnley, with a $90 target price.

Downgrades:

• CrowdStrike Holdings (NASDAQ: CRWD) was downgraded to Hold from Buy at Berenberg, which lifted the target price for the shares to $720 from $525.
• Fiserv (NASDAQ: FISV) was cut to Underperform from Neutral at BNP Paribas, which has a $46 target price.
• Lululemon Athletica (NASDAQ: LULU) was downgraded to Neutral from Buy at BTIG Research, without a price target.
• Suncor Energy (NYSE: SU) was cut to Neutral from Buy at Goldman Sachs, with a $72 target price.
• Walmart (NYSE: WMT) was cut to Hold from Buy at Erste Group, without a target price.

Initiations:

• Airbnb (NASDAQ: ABNB) was initiated with an Outperform rating at CICC, which has set a $165 target price for the stock.
• Comfort Systems USA (NYSE: FIX) was started with a Buy rating at Erste Group, without a price target.
• FedEx Freight Holding Company (NYSE: FDXF) was initiated with a Hold rating at Stifel, with a $160 target price.
• Guardant Health (NYSE: GH) was initiated with a Buy rating at Goldman Sachs, with a $165 target price objective.
• NVIDIA (NASDAQ: NVDA) was started with a Buy rating at China Renaissance, with a $319 price target. 
  
  

The post Here Are Friday’s Top Wall Street Analyst Research Calls: Airbnb, Broadcom, Chipotle Mexican Grill, CrowdStrike, Fiserv, Lululemon Athletica, NVIDIA, Tesla, Walmart, and More appeared first on 24/7 Wall St..

For retirement-focused investors weighing big-box retail exposure, the choice between Walmart (NYSE:WMT) and Target (NYSE:TGT) comes down to a single question: Do you pay up for the defensive compounder, or buy the discounted Dividend King with a turnaround taking hold? Both names are pillars of the consumer defensive sector. Only one belongs in the core of a retirement portfolio today.

Let’s settle it across three dimensions that actually matter for long-duration holders: valuation, income, and growth trajectory.

Round 1: On Valuation, Target Wins

The gap is wide. Walmart trades at a trailing P/E of 40 and a forward multiple of 39, with a price-to-book of 10 and an EV/EBITDA of 20. Target, by contrast, sits at a trailing P/E of 16, a forward P/E of 16, and an EV/EBITDA of just 9.

Put bluntly, Walmart trades at more than triple Target’s earnings multiple despite operating in the same industry. Even after Walmart’s recent slide (shares are down 13% over the past month to $113.03), the multiple still looks stretched relative to the underlying growth rate. Target’s $56.2 billion market cap leaves vastly more room for multiple expansion than Walmart’s $912 billion.

Round 2: On Yield and Income, Target Wins

Retirement investors live on cash flow, and Target writes a bigger check. Target’s annual dividend of $4.54 per share generates a yield of 4%. Walmart’s $0.953 annual payout yields just 1%.

Both companies have impeccable dividend histories. Target is a Dividend King with 50+ consecutive years of increases, and Walmart is a Dividend Aristocrat with a similar streak. But for an investor pulling income today, Target delivers roughly 4x the yield. That gap matters in a sequence-of-returns world.

Round 3: On Growth Trajectory, Walmart Wins

Here Walmart reasserts itself decisively. Q1 FY27 revenue rose 6% YoY to $175.68 billion, net income jumped 19%, and global eCommerce sales surged 26%, now representing 23% of total net sales. The high-margin engines are humming: global advertising up 37% and membership fee revenue up 17%. Management reiterated FY27 adjusted EPS guidance of $2.75 to $2.85.

The post Walmart vs. Target: Which Retailer Is the Better Long-Term Hold? appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) and Target (NYSE:TGT) just delivered their Q1 results within a day of each other, and the contrast is striking.

Walmart leaned on scale, ads, and upper-income share gains to grow profit. Target staged its sharpest comeback in years under a new CEO, riding apparel, beauty, and digital momentum back into investors’ good graces.

Scale Powers Walmart. A Reset Lifts Target.

Walmart pulled in $175.68B in revenue, up 6.1%, with U.S. comps rising 4.1% ex-fuel on 3.0% transaction growth. That traffic line matters more than the headline.

CEO John Furner pointed to “better shopping experiences, a broader assortment, and faster delivery” as the formula, and the data backs him up: global eCommerce climbed 26%, marketplace sales jumped roughly 50%, and Walmart Connect ad revenue (ex-VIZIO) rose 44%. Higher-margin streams are quietly reshaping the P&L.

Target’s $25.44B in revenue grew 6.7%, and EPS of $1.71 beat estimates by 17.03%. The bigger story is comparable sales swinging to +5.6% after last year’s -3.8% decline, with traffic up 4.4% and all six merchandising categories growing.

New CEO Michael Fiddelke called the quarter “encouraging early signs that our clarified strategy is resonating with our guests”. Gross margin expanded to 29.0% from 28.2%, helped by Roundel ads contributing $246M.

Two Retailers, Two Theories of the Customer

Walmart is collecting upper-income shoppers without giving up the value crown, a notable feat with University of Michigan consumer sentiment at a pessimistic 49.8.

Target is going the other direction: betting that an elevated assortment, refreshed stores (capex up 31%), and same-day delivery growth above 27% can pull discretionary spending back. Operating income still fell 22.89%, a reminder the rebuild is early.

The Next Test Is Tariffs and Traffic

Walmart called out a 700 bps Maximum Fair Pricing headwind in Health & Wellness and ongoing IEEPA tariff uncertainty. The key question is whether membership and ad income keep funding price investments.

For Target, the question is whether apparel and home momentum holds through holiday. Tariff refund timing was deliberately excluded from the $7.50 to $8.50 EPS range, leaving room for surprise either way.

The Bull Case for Walmart, With Target Worth Monitoring

On the fundamentals, Walmart’s combination of 26% eCommerce growth, accelerating ads, and broad share gains looks more durable to me. The catch is valuation: at a forward multiple near 40x, a lot is priced in, and the stock fell 4.61% after earnings.

Target is the more interesting setup for turnaround-minded investors. A 3.5% yield, a 16x forward multiple, and a fresh CEO finally posting positive comps give it real upside if Fiddelke can string together two more quarters like this one. Operating income reversal would be a key signal for whether the turnaround is taking hold.

The post Target vs Walmart: Both Fighting For The Same Customer, Only One Wins appeared first on 24/7 Wall St..

It is a staggering valuation. AI superstar Anthropic raised $65 billion with a post-money valuation of $965 billion. That pushed it ahead of arch-rival OpenAI, which was most recently valued at $852 billion. It also puts the Anthropic’s figure ahead of Walmart (NYSE: WMT), which has a market cap of $948 billion.

Walmart is the second-largest company in the US, after Amazon (NASDAQ: AMZN). Walmart’s revenue in its most recent fiscal year was $713 billion, with net income of $22 billion. Walmart has just shy of 11,000 stores worldwide and employs 2.1 million people. The employment number is about the same as the number of residents in New Mexico.

Anthropic’s revenue in the most recent quarter was $10.2 billion, on which $559 million in operating profit. That puts its annual revenue run rate at about $40 billion. Anthropic forecasts that its revenue in 2028 will be $70 billion. In the wild west of AI companies, that forecast number is little more than a guess.

Anthropic’s valuation is based on the belief that AI is the most important technology in history, that it is one of the companies that will rule the sector, and that AI has a tremendous commercial future. (It also depends on whether it can build data centers, which, in aggregate, could cost hundreds of billions of dollars.) It has received large investments from companies such as Amazon and Nvidia (NASDAQ: NVDA), which are willing to back it as one of, if not the, industry leader.

The entire AI sector’s future is beyond reasonable forecasts. Should it be measured by the person using its products, primarily Claude?. Claude’s download pace in the Apple App Store is just behind that of OpenAI’s ChatGPT.

The high valuation is more likely based on enterprise revenue. Venture Beat says Claude has taken the lead in business adoption. “Adoption of Anthropic rose 3.8% in April to 34.4% of businesses, according to the May 2026 release of the Ramp AI Index. OpenAI’s adoption fell 2.9% to 32.3%. Overall AI adoption among businesses rose 0.2 percentage points to 50.6%,” Venture Beat reports.

The comparisons between OpenAI and Anthropic leave out an incredibly important factor. Microsoft, Alphabet, DeepSeek, and Elon Musk’s xAI Grok are spending tens of billions of dollars on software development and hundreds of billions of dollars on AI data centers. The industry remains fragmented, and the cash war chests of each of these companies are staggering. Financial firms have also entered the race, providing capital for AI center buildouts.

While there are many reasons AI revenue will not rise quickly, one is that customers believe AI adoption is too far along at their companies, given the costs. Uber’s management recently said it was measuring AI costs against its productivity improvements. The Wall Street Journal recently reported, “Use of artificial intelligence by big companies is exploding—and the soaring cost has some of them pumping the brakes in a way that could complicate AI’s triumphal march across the economy.”

Anthropic’s valuation is based on both knowns and unknowns. That alone makes a nearly $1 trillion figure risky. At least Walmart has a proven track record.

The post Walmart Worth Less Than Anthropic appeared first on 24/7 Wall St..

Walmart (NYSE: WMT) trades near $118, against a Wall Street average price target of $137.81, leaving roughly 16.8% of implied upside on the table.

The gap opened quickly. The retailer reported Q1 FY2027 results before the open last week, beat on the top line, reiterated full-year guidance, and watched its stock slide anyway. For a name anchoring many retirement portfolios as a defensive consumer staple, the reversal drew attention.

Walmart is the world’s largest retailer, and the bull thesis has shifted from same-store traffic to higher-margin commerce: advertising, marketplace, membership, and a digital flywheel that now contributes meaningfully to operating income. The gap between price and target implies that the market is suddenly skeptical of that story.

A 9.7% Drop on a Quarter That Actually Beat

The damage was concrete. From a filing-day close of $131.30, shares fell 8.4% within a day and finished the week at $118.54, off 9.7%. Over the same five sessions, SPY rose 1.0%.

The headline numbers were solid. Revenue of $175.68 billion grew 6.08% year over year beat by 0.48%. Adjusted EPS of $0.66 came in line with estimates. The problem lay beneath. Higher fuel costs created roughly a 250 basis point drag on operating income growth, free cash flow swung to negative $1.95 billion on capex up 34%, and global inventory rose 8.9%.

Q2 adjusted EPS guidance of $0.72 to $0.74 landed soft against buyside expectations. A premium-multiple consumer staple needs clean prints, and this one had asterisks.

Why the Sell-Side Is Sticking With the Story

Analysts are anchored on the “second P&L”: high-margin businesses growing on top of the retail core. Global eCommerce sales grew 26% and now represent 23% of total net sales. Global advertising revenue rose 37%, marketplace sales jumped nearly 50% (the best in 10 quarters), and membership fees climbed 17.4%. These lines carry materially better margins than groceries.

The store side held firm. Walmart U.S. comp sales rose 4.1% ex-fuel with broad-based share gains, especially among upper-income households. General merchandise posted its strongest share gains in five years. CEO John Furner pointed to “better shopping experiences, a broader assortment, and faster delivery” as the recipe.

The ratings skew constructive. Almost all of 43 covering analysts recommend buying shares. Raymond James reiterated Buy with a target implying about 16% upside, and UBS trimmed its target to $141 from $147 but maintained its constructive long-term stance.

The Math Underneath the Dislocation

As mentioned, the average analyst target of $137.81 implies almost 17% upside from the current price, and analysts ratings lean heavily toward Buy. The share price is 6.4% higher year to date, and the S&P 500 has gained 10.1% over the same stretch. The aforementioned one-week slide of 9.7% converted a market-beating year into a laggard. Longer term, shares are up 21.9% over one year and 150.3% over five.

Valuation remains the rub. The trailing P/E is 42 and forward P/E is 41. That is a rich multiple for a low-single-digit operating-margin retailer, even one with a high-margin digital business inside it.

The Verdict

The bull case has merit if the second P&L thesis holds. Advertising up 37%, marketplace up 50%, and membership up 17.4% are mix-shift inputs that bend the operating margin curve over time. Combine that with a $30 billion buyback authorization and management repurchasing in Q1 at an average $125.51, well above today’s price, and the company is voting with capital.

The bear case is harder to dismiss if these headwinds compound. A forward multiple of 41 leaves zero room for Q2 to disappoint. Fuel pressure, the 100-basis-point Maximum Fair Pricing headwind in Health & Wellness, IEEPA tariff uncertainty, aggressive price cuts from Kroger, and inventory up 8.9% argue this multiple compresses before it expands.

The selloff trimmed over 9% off a business that grew revenue 6%, raised the dividend to $0.99 annualized, and held its full-year line. The risk/reward is workable for patient investors, but Q2 is the next gate, and the multiple gives no margin for error.

The post Why the Walmart Dip Is the Best Buying Opportunity of 2026 appeared first on 24/7 Wall St..

CNBC consumer reporter Brandon Gomez delivered the bad news to anyone hosting a backyard cookout this weekend: “Ground beef for burgers at record highs, up more than 14%. Steak also surging as well over 16%, hot dogs up nearly 11%.” He went further, noting that “even the extras are more expensive cakes, cookies, nonalcoholic beverages all rising about 5% year over year.”

If you budgeted $150 for a Memorial Day cookout that worked last year, you are short. Short by enough to either downsize the menu, eat the difference on your credit card, or skip dessert. This is targeted price pain on the exact basket families buy three or four times a summer, far worse than headline inflation suggests.

Headline CPI Is Lying to Your Grocery Budget

Gomez is completely right, and the standard talking point that “inflation has cooled” is dead wrong for anyone buying meat. The April 2026 Consumer Price Index landed at exactly 333.020, up from 320.795 back in April 2025. While that overall headline shift feels like a low single-digit move on paper, things change at the grocery store. Beef at 14%, steak at 16%, and hot dogs at 11% are running wild multiples of that official baseline.

Take a standard summer cookout for eight people: 3 pounds of ground beef, 2 pounds of steak, a pack of hot dogs, buns, a sheet cake, chips, and a 12-pack of soda. If that exact bundle cost you $90 last Memorial Day, the meat alone, roughly $55 of the total, now runs closer to $63. The secondary sides and sweets cost from $35 to about $37. That means the same spread now costs roughly $100. Multiply that by three summer holidays, and you have easily added $30 to a tight discretionary food budget.

This matters way more than the percentages suggest because of crumbling consumer sentiment. The University of Michigan index dropped to 49.8 in April, setting up May’s brutal drop to an all-time low of 44.8. Both readings sit far below the 60 threshold that historically signals a looming recession. Gomez’s framing fits the data perfectly: “The cost of hosting is continuing to climb at a time when Americans are feeling financially stretched, and that is pressuring grocers.”

Why Retailers Are Fighting Over Your Cart

The grocers know it. Walmart (NYSE:WMT) reported U.S. comp sales up 4% ex-fuel in Q1 FY27 and called out share gains “particularly pronounced among upper-income households.” Wealthier shoppers are trading down to Walmart because beef at 16% above last year stings even six-figure earners. CEO Doug McMillon was blunt on the call: “Food inflation is very much on our mind… our customers have felt that, and they don’t want any more food inflation.”

Kroger (NYSE:KR) is responding under new CEO Greg Foran, the former Walmart U.S. chief brought in to fix pricing. Foran told CNBC: “We’re actually right in the middle of doing that at the moment, so we’re concerned about the cost of living. It makes a big difference when you get your pricing right.” Kroger is planning to close roughly 60 underperforming stores over 18 months to fund price investment. Walmart shares closed Friday near $120 after dropping about 7% over the past month on cautious guidance. Kroger trades around $67, and has dropped around 2% in the past 30 days.

The Variable That Decides Whether You Feel This

What To Do Before Monday

So, where should you start?

1. Reprice your week’s food menu by category, which likely means pulling last year’s receipt or estimate. Tag each item with this year’s cost: meat up 11% to 16%, baked goods and beverages up roughly 5%, produce closer to headline CPI.
2. Substitute within the protein category. Chicken thighs and pork shoulder have not seen the same surge as beef. Swapping one tray of burgers for marinated chicken cuts your meat spend without cutting the guest count.
3. Compare loyalty app prices the morning of. Walmart and Kroger are both running active price cuts to defend share. The same hot dog brand can swing by a dollar between stores in the same week.
4. Track price per ounce, not package price. Shrinkflation is very real this cycle; smaller bag, same sticker.

The good news is that your cookout can still happen, it’s just going to cost about 10% more this year, which means your budget has to grow by that amount or your menu has to shrink.

The post Memorial Day Cookout Costs Are Crushing Wallets: Beef Up 14%, Steak Up 16%, Hot Dogs Up 11% appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) just delivered a quarter that makes the bull case for 2030 hard to ignore. Q1 FY27 revenue hit $175.68 billion, up 6.08% YoY, with global eCommerce climbing 26% and advertising revenue jumping 37%. New CEO John Furner is leaning into automation and higher-margin commerce.

Yet shares are down 8.39% in the past week and sit at $121.34. Can Walmart reach $200 by 2030?

Why Walmart Shares Are Stuck Despite a Strong Quarter

The Q1 report was solid, but the stock reaction was ugly. WMT fell 7.27% on May 21. The pullback reflects margin pressure and capex concerns. Maximum Fair Pricing legislation created a roughly 700 basis point headwind in Health & Wellness, fuel costs added another 250 bps, and Q1 free cash flow swung to negative $1.95 billion on capex of $6.68 billion (up 34% YoY).

Shares are still up 9.35% YTD and 26.89% over one year, but the 1-month return of -6.2% reflects skepticism that elevated investment will pay off quickly. With a beta of 0.65, this is a low-volatility name. The selling has been largely technical.

Wall Street Sees Limited Upside. I Think They’re Anchoring Too Low

Consensus is constructive but cautious. 39 analysts rate WMT a Buy or Strong Buy, against just 3 Holds and 1 Sell, with a consensus target of $137.78. Our model’s 1-year base case lands at $140.68 (15.94% upside), with a bull case of $147.93 and bear case of $123.49.

Confidence is high at 90%. Stretch to 2030 and our base case is $181.67, optimistic $188.32. With 91% of analysts bullish and Walmart still gaining share from upper-income households, consensus underweights how durable this growth cycle could be.

The Path to $200 Per Share by 2030

Reaching $200 from today’s price of $121.34 requires a 64.8% gain. Over roughly four years, that works out to mid-teens annualized returns, well above the model’s 9.99% annualized base case.

With forward EPS of $2.94, a price of $200 implies a forward P/E of 68x. Our base case of $140.68 already implies 45x, meaning the bold target requires 23x of additional multiple expansion on today’s EPS base.

The realistic path runs through EPS growth. If Walmart compounds adjusted EPS in the high single digits from the $2.75 to $2.85 FY27 guide, forward EPS approaches $4 by 2030, and $200 starts to look like a 50x multiple instead of 68x.

The drivers exist. Marketplace sales up nearly 50%, membership fees up 17.4%, and advertising up 37% are all higher-margin streams. As Furner put it, “Our teams are adopting innovative technologies, driving productivity through automation, and growing higher-margin commerce solutions.” The risk: tariff pass-through and Maximum Fair Pricing legislation could compress margins faster than mix improves.

Where Walmart Trades Today vs Its Earnings Power

Current forward P/E sits at 41x on $2.94 forward EPS. That is rich for a traditional retailer, but advertising, marketplace, and membership are reshaping Walmart’s margin profile. Shares are 2% below the 52-week high of $135.16 and well above the $92.66 low. The 521.57% 10-year return shows what long-term compounding looks like when execution stays disciplined.

Can Walmart Really Hit $200? My Verdict

Reaching $200 by 2030 requires a 64.8% gain. I view it as a stretch, but credible.

Three things need to go right: adjusted EPS compounds into the high $3 range by FY30, advertising, marketplace, and membership keep scaling double-digits, and the market pays a premium multiple for that mix shift. What derails it: sustained margin hits from regulated pricing or tariff escalation that the productivity flywheel can’t offset. We’ve outlined the blueprint for how Walmart could reach $200 in 2030.

The post Where Will Walmart Stock Be By 2030? appeared first on 24/7 Wall St..

Shares of Walmart (NYSE:WMT) are down 7% in midday trading Thursday, a striking move for a defensive mega-cap that just reported quarterly results before the open. The reaction has dragged on peers, though not uniformly. Costco Wholesale (NASDAQ:COST) is off 2%, while Target (NYSE:TGT) is actually bouncing 2% after its own sharp drop on Wednesday.

The session reads like a continuation of this week’s theme in big-box retail: good underlying businesses, bad stock reactions. Walmart stock is the latest to take the hit, and the question for shareholders is whether today’s drop is a sell signal or a setup.

The honest answer requires a step back from the tape. Walmart shares had climbed 18% year to date through Wednesday’s close at $130.85, so today’s reset comes from a fairly high base. Thus, the context should be considered before anyone touches the sell button on WMT stock.

The Big-Box Trio at a Glance

Across time frames, all three names entered Thursday with healthy momentum. Walmart was up 35% over one year and 195% over five years. Target carried a 28% year-to-date gain, and Costco was up 25% year to date.

The five-year picture sharpens the story. Costco stock has returned 177% versus 158% for Walmart’s, while Target is the structural laggard at -44% over five years. A single session shouldn’t redraw that map, but it can open relative-value windows within it.

Why Walmart Is Getting Slammed

Walmart reported its earnings before the open, and the market is reacting negatively to the package as a whole. The market’s verdict is clear in the price. A 7% single-day drop is unusual for a name with WMT stock’s defensive profile.

The valuation backdrop magnifies the move. Walmart trades at a P/E ratio of 49x, which leaves little cushion when the post-report narrative shifts even slightly. Analysts heading into the print were positioned bullishly on Walmart, with 39 buy ratings against 1 sell and a consensus price target of $137.78.

Target’s Bounce and the Costco Setup

Yesterday, the market punished Target CEO Michael Fiddelke’s cautious outlook commentary. Today Target stock is recovering, which suggests that Wednesday’s reaction was an overreaction.

That pattern is worth holding in mind for Walmart stock. The reflexive post-earnings selloff in defensive retail this week has, in Target’s case, started to correct within 24 hours. Whether WMT stock follows the same script is the open question for short-term traders.

Costco stock’s relatively modest decline today looks like sympathy weakness rather than a Costco-specific verdict. The company reports its earnings on May 28, and its premium multiple gives COST stock the thinnest margin for error of the three when its own print lands.

A Framework for Reading the Drop

The retail consumer remains healthy, overall. April retail sales hit $757.1 billion, the highest reading in the trailing 12 months and a 91.7th percentile historical observation. Walmart’s customer base, in other words, is still spending.

For long-term holders, a 7% drop in a mega-cap defensive name often resembles a tactical reset within a longer uptrend. WMT stock’s track record over five years argues for patience rather than reaction. The valuation is rich, but the Walmart franchise is one of the strongest in U.S. retail.

For traders, the post-earnings volatility window in Walmart stock is the trickiest place to make a decision. For Target holders, Wednesday’s overshoot has already partly corrected. For Costco’s stockholders, the next real catalyst is the May 28 print, not today’s session.

Watch for whether Walmart stock can stabilize into the close and how analysts revise WMT price targets by Friday morning. Today’s move reflects market reaction more than business reality, and the next 48 hours of follow-through could tell investors which side of that line to trust.

The post Walmart Is Getting Slammed Today. Should You Sell WMT Stock Along With Target and Costco? appeared first on 24/7 Wall St..

The value-over-growth rotation that strategists had been calling for since the start of the year is finally showing up in fund returns. Through mid-May, large-cap value indexes are running ahead of several large-cap growth peers for the first sustained stretch in years, and the three cleanest vehicles for capturing it are Vanguard S&P 500 Value Index Fund ETF Shares (NYSEARCA:VOOV), SPDR Portfolio S&P 500 Value ETF (NYSEARCA:SPYV), and iShares S&P 500 Value ETF (NYSEARCA:IVE).

All three track variants of the S&P 500 Value Index, screening the same 500 companies on book-to-price, earnings-to-price, and sales-to-price ratios. The differences sit in cost, scale, and small methodology quirks that compound over years. Most investors are still parked in growth funds and looking the other way, which is exactly what makes the setup interesting.

Why Value Is Working in 2026

The backdrop is straightforward. Mega-cap growth concentration has loosened, the energy and financials weight inside value indexes is paying off as rates stay higher for longer, and earnings revisions for traditional cyclicals have held up better than for unprofitable tech. WisdomTree’s research desk described early 2026 as a sharp rotation into value followed by a growth rebound in late April, which is consistent with what these three funds have delivered.

Year to date, VOOV is up about 6%, SPYV is up roughly 6%, and IVE is up around 6%. Over the trailing year, each has returned close to 19%, which has quietly beaten several pure growth ETFs that loaded up on the same handful of AI names. That is the headline most investors have missed.

VOOV: The Vanguard Workhorse

VOOV is the cleanest expression of the S&P 500 Value Index for investors who want Vanguard’s structure and tax efficiency. The fund charges an expense ratio of 0.08% and manages about $5.8 billion in net assets, which is large enough for tight spreads but smaller than its iShares competitor.

What surprises people about VOOV’s portfolio is how much technology sits inside it. Information technology is the top sector at 24% of the fund, followed by financials at 17% and health care at 14%. The S&P methodology splits some mega-cap names across both the growth and value indexes when their valuation signals are mixed, so VOOV ends up owning slices of Apple and Microsoft alongside Exxon Mobil and JPMorgan. That blending is why VOOV has tracked closer to the broader S&P 500 in recent years than purer deep-value funds have.

The 30-day SEC yield sits modestly above the S&P 500 itself. For a long-term core allocation, VOOV is the option that asks the fewest questions: low cost, deep liquidity, Vanguard’s patient indexing operation behind it. The tradeoff is that its tech weight means it will not protect you in a true value-rally-with-tech-selloff scenario the way a strict deep-value fund would.

SPYV: The Cheapest Way In

SPYV is the cost leader of the group at an expense ratio of 0.04%, half of what VOOV charges and less than a quarter of what IVE charges. For an index product where every issuer is buying the same basket, that fee gap compounds into meaningful dollars over a 20-year hold.

The portfolio profile differs slightly from VOOV in ways that matter for the rotation thesis. Information technology is still the largest sector at 17%, but financials at 16%, industrials at 11%, and energy at 8% are all heavier than in VOOV. That gives SPYV more of the cyclical tilt that has been driving value’s outperformance this year. Top holdings include Apple at about 7%, Amazon at 4%, Exxon Mobil at 3%, and Walmart at 2%.

The dividend yield comes in around 1.9%, the highest of the three, which reflects that heavier energy and consumer staples weight. For an investor running the value rotation on a cost-sensitive basis, SPYV is the strongest pick on the list. The tradeoff: SPYV trades at a lower per-share price near $60, which is fine in most brokerages but can introduce minor rounding friction in dollar-based dividend reinvestment plans.

IVE: The Liquidity Choice With a Cost Penalty

IVE is the oldest of the three, launched by iShares more than two decades ago, and it remains the deepest-liquidity option for institutions running large trades. The portfolio is essentially the same S&P 500 Value basket. The problem is the expense ratio, which is more than double VOOV and more than four times SPYV.

For a fund that holds the same index constituents as its cheaper competitors, that fee differential is hard to defend on cost alone. Where IVE earns its place on this list is in execution. Its daily trading volume is deep, options markets are active, and the bid-ask spread is consistently tight even in stressed conditions. For investors who plan to trade in size, write covered calls against the position, or use the ETF inside more complex structures, that depth is worth paying for.

The 30-day SEC yield on IVE is in line with VOOV. Performance has tracked the index closely. The tradeoff is exactly what it looks like: you pay a fee premium for liquidity and brand familiarity that most buy-and-hold retail investors will never use.

Picking Between the Three

The decision framework is shorter than the list of similarities suggests. For cost-focused long-term holders, SPYV is the most efficient default. Its 0.04% expense ratio, slightly heavier cyclical tilt, and higher dividend yield make it the strongest expression of the value-rotation thesis for most retail investors.

Investors who already run their core portfolio at Vanguard, or who value the firm’s index-management culture, will be perfectly served by VOOV. The fee gap to SPYV is real but small in absolute terms, and the operational simplicity of keeping a single issuer matters more than four basis points for many households.

IVE is the institutional and options-trader pick. If you are not using its liquidity advantage, you are paying for something you do not need. The bigger question for all three is whether the value-over-growth rotation extends through the back half of 2026 or reverses as it did briefly in April. Earnings breadth in financials and energy, plus the trajectory of long-end rates, will decide that. Sector earnings revisions are the signal worth tracking.

The post Three S&P 500 Value ETFs Beating Some Growth Rivals in 2026 and Most Investors Are Still Looking the Other Way appeared first on 24/7 Wall St..

One of the best ways to gauge how badly Target (NYSE: TGT) has been beaten down by competitors is to look at the five-year performance of the company and its competitors, Walmart and Costco (NASDAQ: COST). Over the period, Target’s stock has been down 45%. Walmart’s (NYSE: WMT) is 131% higher. Costco is up 180%. Investors abandoned the chance of a recovery long ago, and Target’s results show why

In the most recent quarter, Target largely outperformed expectations. Revenue rose 6.7% to $25.4 billion. But net earnings were a less-than-modest $781 million, down 24% from the year-ago period. Earnings were not the sole measurement of Target’s problem. The worst problem is scale.

Costco’s revenue in the most recent quarter was $68.2 billion. Walmart’s comparable figure for its US operations was $117 billion. But by these standards, Target is very small.

Target bests Costco in locations. Costco has 634 in the US and Puerto Rico. Target has 2,000. Walmart has 4,600. The edge Costco has, however, is the genius of its model. It charges people to shop in its stores. Its quarterly membership fees are slightly more than $1.3 billion, almost all of which goes to the bottom line. They are about 65% of Costco’s operating income. No other large retailer has been able to match the powerful financial structure.

Walmart’s muscular model is that 90% of Americans live within 10 miles of a Walmart or Sam’s Club. And, Walmart has a substantial e-commerce business.

Another problem Target has is its image among Americans. It is a poor one, which makes it difficult to bring people through its doors. Based on the 2026 Axios Harris Poll 100 reputation rankings, which were just released, Target ranks 71st. Costco ranks fifth. Walmart ranks 83rd. Walmart’s figure hasn’t kept it from being America’s largest retailer by far.

Amazon (NASDAQ: AMZN) has been charged with ruining America’s retail landscape. Whether that is true or not, it affects almost every store chain in the country. Its North America e-commerce revenue was $104 billion in its most recently reported quarter. Target, based on Amazon’s success, is one of its victims.

Target has the problems of scale and reputation. It is too far behind the industry leaders to catch up, or even come close

The post Target Badly Crippled By Competition appeared first on 24/7 Wall St..

The rollercoaster ride continues.

At the moment, the S&P 500 is down 0.36%, or by 27 points. The SPDR S&P 500 ETF (SPY) is down 0.24%, or by $1.78. The Dow is down 0.31%, or by 166 points. The Nasdaq is down 0.55%, or by 156 points. Oil is up by $2.86 at $101.14. Gold is down by $20 at $4,512.

Just yesterday, markets exploded higher on lower Treasury yields and lower oil prices. Today, Treasury yields are up, and oil is gushing $2.45 higher because of the war.  Not helping, the Supreme Leader of Iran says enriched uranium must stay in Iran.

As noted by Reuters, “Israeli officials have told Reuters that Trump has assured Israel that Iran’s stockpile of highly enriched uranium needed to make an atomic bomb will be sent out of Iran and that any peace deal must include a clause on this. Israel’s top officials, the sources said, believe that sending the material abroad would leave the country more vulnerable to future attacks by the United States and Israel.”

All of which raises concerns that the war is far from over.

Market Movers: Nvidia Crushed Earnings 

Last night, Nvidia (NASDAQ: NVDA) saw adjusted EPS of $1.87, as revenue exploded 85% year over year to $81.61 billion. Analysts had expected the company to earn an adjusted $1.75 per share on $79.19B in revenue.

Data center revenue came in at $75.2 billion, as compared to estimates of $73.48 billion.  Edge Computing revenue was $6.4 billion, up 29% year-over-year. Adjusted gross margin came in at 75% for the quarter, in line with estimates. NVDA also generated $48.55 billion.

Moving forward, Nvidia expects revenue to be $91 billion, plus or minus 2%. The company also said that it does not expect any revenue from China for the period. Analysts had expected the company to generate $87.3 billion in revenue. Nvidia also added $80 billion to its share buyback program. And it raised its quarterly dividend to $0.25 per share, up from a prior $0.01 per share, which is payable to shareholders of record on June 4 on June 26.

Still, despite that news, NVDA slipped, with analysts saying investors “have got used to Nvidia delivering stellar results and amid some concerns that it will face growing competition,” as noted by the BBC.  “Nvidia represents 8% of the S&P 500. Unless there’s a belief in this continued parabolic growth, it’s difficult for investors to get super excited, although Nvidia posted outstanding numbers.”

Market Movers: Walmart Slips on Earnings Miss 

Shares of Walmart (NASDAQ: WMT) are down after issuing a worse-than-expected outlook for the full year and current quarter. The retailer said it’s expecting 2027 adjusted earnings per share to be between $2.75 and $2.85, lower than expectations of $2.91. It also anticipates that net sales will rise between 3.5% and 4.5% for the year.

For the current quarter, it expects adjusted earnings per share to be between 72 cents and 74 cents, missing expectations of 75 cents. Walmart anticipates net sales will climb 4% to 5% for the quarter. All as consumers deal with sticky inflation, war, and higher oil prices.

All of which raises concerns about the real health of the U.S. consumer.

The post Stock Market Live May 21, 2026: S&P 500 (SPY) Slips as Oil Gushes Higher appeared first on 24/7 Wall St..

Shares of Target (NYSE:TGT) are down 7% to $118 in early trading on Wednesday, May 20, after the retailer delivered a clean beat-and-raise quarter that investors are nonetheless selling. The reversal comes after a sharp rally into the report, with the stock entering the session up 33% year to date (YTD).

The headline numbers were strong. Target posted Q1 2026 net sales of $25.4 billion, comparable sales up 6%, and adjusted EPS of $1.71 versus a $1.46 consensus. Management also raised the full-year sales growth target to 4%, doubling its prior guide.

So why is the stock melting down, and what does it mean for Walmart (NYSE:WMT) and Costco (NASDAQ:COST), both of which report soon? The short answer: this looks more like positioning than a verdict on consumer-value retail.

A Beat-and-Raise That Wasn’t Enough

The quarter ended four consecutive quarters of negative comps. Traffic grew 4%, and digital comps rose 9%. Roundel advertising, Target Circle 360 memberships, and Target+ marketplace revenue each grew 25%.

Yet, Target CEO Michael Fiddelke paired the upbeat tone with hedging language. He noted that the company is “maintaining a cautious outlook given the work we know we have in front of us and ongoing uncertainty in the macroeconomic environment.” That kind of framing tends to spook momentum traders after a stock has run hard.

Sell-the-news mechanics did the rest. Target stock entered the session with a strong one-year gain of 35%. A simple beat was never going to clear that elevated bar.

Walmart Heads Into Earnings With a High Bar

Walmart reports Thursday, May 21. The bullish read from Target’s print is straightforward: traffic and comps accelerated at a value-oriented retailer, and Walmart benefits from the same consumer behavior, often more powerfully given its grocery scale. The most recent Walmart quarter showed U.S. comps of 5% and global eCommerce growth of 24%.

The cautionary read is that Walmart stock is up 21% YTD and 38% over one year. The Polymarket crowd is pricing an 81.5% probability that Walmart beats the $0.66 consensus. Expectations are elevated.

The fundamentals look healthy. However, Walmart shareholders should recognize that a beat alone may not be enough if forward commentary carries any hedging, with the stock already off 1% in early trading.

Costco’s Premium Multiple Cuts Both Ways

Costco reports May 28, and the setup is similar. The membership model is durable, with 82.1 million paid memberships and a 90% worldwide renewal rate. Last quarter’s comp sales were up 7%, with digitally enabled comps up 23%.

The valuation is the issue. Costco trades at a P/E ratio of 56x, and the stock is up 26% YTD. Reddit sentiment turned bearish overnight, with one thread flagging “weird piling into COST and CRWD.”

Costco stock is down 1% this morning, suggesting that traders are extending the Target read-through. A premium multiple leaves less room for any soft data point.

What to Watch

Target’s selloff reflects positioning dynamics after a strong run-up. The actual operating data was strong, and the beat was real. The market’s reaction reflects how much was already priced in after a 33% YTD run, combined with Fiddelke’s hedged language about macro uncertainty.

For Walmart and Costco shareholders, the honest read is to stay alert rather than panic. The fundamentals across value retail look healthy, but elevated valuations mean upside surprises are what could move these stocks higher. Modest position trimming into earnings reports can be a reasonable risk management approach for investors with outsized gains.

Watch for whether Walmart’s Thursday morning report delivers the kind of forward commentary that justifies its rally, and whether Costco’s May 28 release can clear a similarly elevated bar. Today’s Target reaction is the template.

The post Target Is Melting Down Today. Should Walmart and Costco Stockholders Worry? appeared first on 24/7 Wall St..

Once a year, the results of “The 2026 Axios Harris Poll 100 reputation rankings” are released in May. It is based on a poll of 6,226 Americans to pick the 100 most visible brands in America. Then, more people are surveyed on issues “related to brands and politics.”

One thing that is clear from the reputation rankings is that they have no relationship to share price performance. The No. 1 brand on the list was Chewy (NYSE: CHWY), the online pet supply company. Its stock is down 41% this year. Recent comments by its CEO sent the stock plummeting in a single day.

Chewy management is anxious about its prospects. CEO Sumit Singh told attendees at the J.P. Morgan Technology, Media & Communications Conference, “In the last couple of months, we are continuing to see and interpret the consumer as being more stretched than we were when we entered the year.” Investors panicked and sold the stock off by 9% in one day.

In the final quarter of last year, revenue barely moved, to $3.3 billion. EPS rose from $.06 to $.09. However, net margins continue to be tiny. Chewy also has a competition problem. Within its sector, this includes Petco (NASDAQ: WOOF) and PetSmart. However, they are not the problem. Retail giants Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) also compete. Chewy operates online only. Most of the competition has stores and e-commerce operations.

Chewy’s position in the Axios Aharris poll is unusual. The top five companies in the survey results are Toyota, Samsung, Nvidia, and Costco.

Chewy got the admiration, but not the money

The post America’s Best Brand Has One Of America’s Worst Stocks appeared first on 24/7 Wall St..

Most Americans have never heard of Standard Chartered Plc. It is one of the 30 largest banks in the world, after the Chinese banks pulled out. Its CEO, Bill Winters, made the point, as some of his colleagues in the financial industry have, that job losses at his bank will be in the thousands or tens of thousands due to AI. Among bank executives, it is close to a chorus

His comments about the employees involved are highly insulting. He called them “lower-value human capital,” according to Bloomberg. He described a plan under which 15% of Standard Chartered’s support staff will be gone in less than five years. Bloomberg calculates that the bank has 52,000 people who fit this description. And his assessment was nothing short of brutal. At a conference he said, “It’s not cost cutting; it’s replacing in some cases lower-value human capital with the financial capital and the investment capital we’re putting in,” Nevertheless, the people fired are human.

There are two schools of thought about AI’s effects on jobs. And within one of these, there are two more. The first case is that AI will make more products and somehow add people to the workforce. The arguments for this are usually less than convincing.

The cases for job losses fall into separate parts. One is that well-educated people will not find jobs at well-paying companies. This includes financial firms, banks, and large consulting firms. One example of this is job cuts at McKinsey, the world’s leading consultancy. AI can do what low-level analysts can do, even if those analysts graduate from Harvard Business School.

The other part of the job cut argument is that the most poorly paid jobs in America will be eliminated. People who work the floors at Walmart (NYSE: WMT) will be replaced by AI-driven robots. These can find people’s merchandise and act as cashiers. This include a retail sector that employs millions of people. The sector is led by McDonald’s (NYSE MCD) and Walmart, but it is much larger than those.

Although his comments are cruel, Winters sees a future in which he can make more money, as long as he fires enough people.

The post AI Job Destruction Is Coming, Another CEO Says appeared first on 24/7 Wall St..

As investors pile in (and now, rush out) of the red-hot semiconductor trade as the go-to way to play the AI revolution and the big AI compute inflection point that many might still underestimate if agentic AI really does live up to the hype by offering meaningful returns on all that AI-related CapEx, perhaps it’s time to think about some of the AI monetizers that could also win big, though perhaps not as massively as the hyperscalers.

When it comes to some of the more under-the-radar AI beneficiaries, I think it’s worth exploring the names beyond just the tech sector. Retail stands out as one of the industries that could be transformed for the better at the hands of AI. Indeed, retail margins are known to be quite thin, especially when it comes to the big-box retail plays with huge grocery exposure.

Walmart is the AI winner you probably haven’t considered

Either way, AI is a profound technology that might just allow the leaders in the space to utilize the technology most effectively to level up their operating margin profiles as well as their sales growth. Either way, Walmart (NASDAQ:WMT) is a rather stealthy AI play that I think the market is just starting to get to know. Make no mistake, shares of Walmart have been rewarded for their tech-savvy. They’ve not only made smart bets on cutting-edge tech over the years, but it’s translated to results.

It’s no longer that low-margin staple that investors only look to buy when they think the economy is headed for a nasty recession. Of course, I’d still expect Walmart stock to hold its own far better than the rest of the market if such a climate were to happen.

In any case, Walmart’s AI strategy is shaping up to be one of the most exciting in all of the retail space, perhaps second only to Amazon (NASDAQ:AMZN), which is also a hyperscaler that’s leading the CapEx spending race with $200 billion to be spent on its AI efforts this year. That magnitude of AI spend makes a statement, especially when you consider it’s some tens of billions more than many of its hyperscaler rivals.

Walmart’s prudent spend on AI is already starting to pay off

While Walmart isn’t spending such an obscene amount, it is betting big on physical AI (robotics in the warehouse) to unlock operating efficiency gains by way of automation. It’s also betting big on agentic AI that could help power a better, more convenient customer experience, and, with that, more sales.

Whether we’re talking about the Sparky AI shopping assistant and its potential to evolve into Walmart’s horse in the agentic shopping race, or the “walk out” tech at the local Sam’s Club that takes even more friction away from the purchase, I think Walmart has everything it takes to enter a new era of growth.

Indeed, the only thing that’s better than offering the best value to consumers (lower prices, higher quality private-label goods) is being able to offer it without all the friction at the till or digital checkout, and the opportunity to be had in grocery delivery. The rise of agentic commerce and physical AI tech at physical stores, I think, will make it as quick and easy as ever to get what one needs at the best price as quickly as possible.

The big question is how much more people will spend if they’re able to buy with less and less effort. Could it be we’re entering an era where a future version of Sparky knows what to buy before you do?

Time will tell. Either way, I think it’s becoming more apparent that Walmart is more of a tech-retail titan, given its relatively heightened 48.8 times trailing price-to-earnings (P/E) multiple. Also, like big tech titans, Walmart has been conducting layoffs, with the recent announcement that 1,000 jobs are going to be cut or relocated.

The post This Retailer Might Rise as a Top Stealth AI Play appeared first on 24/7 Wall St..

The VanEck Retail ETF (NASDAQ:RTH) and the SPDR S&P Retail ETF (NYSEARCA:XRT) both sit in the retail bucket, yet the year-to-date gap between them tells a different story. RTH is up 5.79% in 2026 while XRT is down 6.25%. Same sector label, two very different bets, and the difference comes down to one decision: who gets to vote, and how loudly.

What Each Fund Is Actually Betting On

RTH holds roughly 25 retail names and weights them by market capitalization. That means Amazon (NASDAQ:AMZN), with a market cap of $2.9 trillion, plus Walmart (NYSE:WMT) at roughly $1.06 trillion, dominate the portfolio. RTH is really a concentrated bet on mega-cap consumer platforms. Owning RTH means importing Amazon’s AWS thesis into a retail allocation, because AWS posted 28% growth in Q1 2026, its fastest pace in 15 quarters, and that engine moves the fund.

XRT takes the opposite approach. It holds roughly 75 names and rebalances them quarterly back to equal weight. A struggling auto parts chain, a regional apparel retailer, and Amazon all carry roughly the same vote. That makes XRT a purer read on brick-and-mortar retail health rather than a stealth tech position.

Where the Difference Shows Up

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Amazon climbed 19.26% from January 2 through May 13, and that single name drives a large share of RTH’s return. In XRT, Amazon contributes the same as any other holding. Even strong YTD moves from Target (NYSE:TGT) at 26.69% and Walmart at 18.48% have not been enough to offset weakness across XRT’s long tail of specialty and discretionary retailers.

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The five-year picture is starker. RTH is up 60.78% while XRT is down 7.76%. That gap reflects two different asset classes wearing the same uniform.

Practical Comparison

The Verdict

RTH fits an investor who wants concentrated exposure to the winners of digital retail and is comfortable owning what is effectively a partial Amazon and Walmart position. XRT fits an investor who believes specialty retail, auto parts, and discretionary store chains are mispriced and ready to mean-revert. For most investors today, RTH is the cleaner expression of where retail profit pools actually sit. What flips the call is a small-cap rotation or a meaningful Amazon drawdown, since both would shift the math in XRT’s favor overnight.

The post RTH Owns Amazon and Walmart. XRT Owns Everything Else. That 12% Gap in 2026 Is No Accident appeared first on 24/7 Wall St..

Walmart (NYSE:WMT) is the grocery story everyone wants to own right now, with a $1.047 trillion market cap and a stock that has climbed 34.53% over the past year. But here’s what you should actually be watching.

The Walmart Trade Has Gotten Ahead of the Story

The pitch you keep hearing is that Walmart is winning groceries. Fine. The problem is that the multiple you are paying has almost nothing to do with the groceries. At a trailing P/E near 48 and a price to free cash flow of 70, The market is valuing this like an advertising and eCommerce growth platform, which is exactly the narrative management is selling. Advertising revenue grew 37% to $6.4 billion, eCommerce jumped 24%, and the VIZIO integration gives the story a tech sheen. That is the multiple expansion engine, not the milk and eggs.

Strip away the hype and what you actually own is a company where Q4 net income fell 19.36% year over year to $4.24 billion even as revenue grew, where net profit margin sits at 3.07%, and where management guided FY27 adjusted EPS of just $2.75 to $2.85. Even Benzinga flagged that Walmart now trades richer than the S&P 500 and even NVIDIA (NASDAQ:NVDA), with a double-top forming on the chart. Retirement money chasing that setup is the definition of being in the crowd, not ahead of it.

Kroger Is the Trade Walmart Pretends to Be

If you believe inflation is going to stay sticky and shoppers will keep trading down, the cleanest way to own that is Kroger (NYSE:KR), a $40.7 billion pure-play grocer the market keeps treating like an afterthought. Three reasons it belongs on your radar.

First, private label is actually working. Kroger’s Our Brands portfolio drove gross margin to 23.1% from 22.7% last quarter, with sourcing gains and lower shrink doing exactly what private label is supposed to do in a trade-down cycle. BrandSpark and Newsweek named Kroger the most-trusted Midwest supermarket in 2026, ahead of Walmart. Trust plus margin is a powerful combination when families are squeezed.

Second, the valuation is on a different planet. Kroger trades at a forward P/E of 13 against Walmart’s 44. You also get a 2.06% dividend yield, a fresh $2 billion buyback authorized in December 2025, and FY26 adjusted free cash flow guidance of $2.7 to $2.9 billion. No one is paying you to wait at Walmart’s multiple.

Third, the fundamentals are quietly accelerating. Identical sales went from Q1 +3.2% to Q2 +3.4% to Q3 +2.6%, with Q4 +2.4%, eCommerce has run between 15% and 20% growth all year, and management is guiding to $400 million of eCommerce operating profit improvement and the inflection to digital profitability in 2026. FY26 adjusted EPS guidance of $5.10 to $5.30 implies real earnings growth at a single-digit-teens multiple. New CEO Greg Foran said it plainly: “Kroger delivered a strong finish to the year, with improving market share trends and solid sales growth that reflect meaningful progress strengthening the business.”

The Action

Skip the crowded Walmart trade at 48 times earnings and put Kroger on your research list while the private label margin story and the eCommerce inflection are still hiding in plain sight.

The post Forget Walmart. The Grocer Beating It on Trust and Margin Trades at a Third of the Multiple appeared first on 24/7 Wall St..

Meredith Whitney, CEO of Meredith Whitney Advisory Group, returned to CNBC May 14, 2026 with a warning that cuts against the “resilient consumer” refrain from bank earnings calls. Her argument: middle-income America has shifted from living paycheck to paycheck into something more fragile, and the traditional banking system can no longer see it.

The Shadow Banking Shift

Whitney’s framing is direct. "The state of the consumer has changed dramatically from the last credit cycle. And a lot of people continue to look at banks, ceos for guidance, and bank ceos continue to use the word. The consumer’s resilient. But the reality is the banks have not been exposed to as wide a swath of consumers as they were during the last credit cycle."

The mechanism, in her view, is withdrawal. "Banks have pulled dramatically back from consumer lending and from many consumers. And that restrictive lending environment has driven so many consumers out of the banking system." What replaced bank credit is a private market most investors never see on a balance sheet.

"More consumers, more households aren’t living paycheck to paycheck, but payday to payday. So in the private, you know, shadow banking system, there’s on demand pay where employees can access daily pay wages as opposed to biweekly checks. And that has been exploding in terms of growth." The harder edge is pawn. "The average apr on a pawn loan, as an example, a monthly pawn loan can be in excess of 200%. And these are the unintended consequences."

Kraft Heinz CEO Steve Cahillane corroborated the squeeze: "People are running out of money at the end of the end of the month."

The Data Behind the Warning

The macro picture supports the thesis. The U.S. personal savings rate has compressed from 6.2% in 2024Q1 to 4.0% in 2026Q1, with Americans now spending roughly 92.3% of disposable income. Yet headline retail sales reached $757.1 billion in April 2026, up 0.5% month over month, and weekly jobless claims sit at 211,000. University of Michigan consumer sentiment, at 53.3 in March 2026, signals strain beneath the surface.

Why Walmart and the Dollar Stores Matter

This is where Whitney points investors. Walmart (NYSE:WMT) flagged grocery share gains led by upper-income households in its most recent results, the signature of trade-down behavior. The stock is up 19.37% year to date through May 14, with the market rewarding that mix shift. Doug McMillon’s most recent shareholder letter emphasized value and convenience as the company’s anchor.

The dollar channel tells a different story. Dollar General (NYSE:DG) posted same-store sales growth of 2.4% on flat traffic, with CEO Todd Vasos citing "potential uncertainty related to consumer behavior". Shares are down 20.17% year to date. Dollar Tree (NASDAQ:DLTR) is down 26.86% year to date despite 5.4% comp growth.

The split matters. When the consumer who funds dollar-store traffic borrows at 200% APR to make it to Friday, the spending shows up in retail sales before strain appears elsewhere. Watch the value retailers for the first crack.

The post Meredith Whitney Warns: The One Money Move Middle-Income Americans Are Making to Survive Each Month appeared first on 24/7 Wall St..

The rich get richer in two ways. One way is the way Elon Musk and Warren Buffett did. They earned it themselves. The other way is inheritance (it’s based on luck). The richest family on the lucky list is the Waltons. They have climbed onto the rich train because their father, Sam Walton, started the second-largest company in the US. It’s Walmart (NYSE: WMT). He started it in 1962 and died in 1992. The best way to look at him is as one of the greatest founders and CEOs in history. He bested the two largest retail incumbents. These were Sears and J.C.Penney. Each of those companies is virtually gone now.

The richest member of the family is Jim Walton, the world’s 9th-richest person, with a net worth of $157 billion. That figure is up to $21 billion this year. His brother, Rob Walton, is the 11th-richest person in the world, with a net worth of $154 billion, up $20 billion. Their sister, Alice, has a net worth of $153 billion, up $20 billion, making her the 11th-richest person in the world.

Individually, each is worth more than Warren Buffett ($145 billion) and Bill Gates ($102 billion). Together, the Waltons are worth $462 billion, which would put them in second place on the Bloomberg Billionaire list behind only Elon Musk (696 billion)

The Walton family’s wealth is based almost exclusively on Walmart’s stock price. The stock is up 18% this year compared 8% for the S&P 500

Walmart has a market cap of $1.05 trillion. That makes it the 12th-most-valuable company in the world, just behind Samsung.

The Walton family owns 45% of Walmart. It has no role in management. Steuart Walton, one of Sam Walton’s grandchildren, is on the board.

The Walton family wisely chose professional management to run the company. The latest example is the current CEO, John Furner. He started as an associate in 1993.

The post Richest Family In The World Just Got Richer appeared first on 24/7 Wall St..

Wall Street’s chat rooms can’t stop talking about GameStop (NYSE:GME) after Ryan Cohen’s $56 billion offer for eBay (NASDAQ:EBAY) sent the meme crowd into another frenzy. But here’s what you should actually be watching.

The eBay bid is theater dressed up as strategy. Polymarket traders price the odds of GameStop actually closing the deal at 15.5%, and the underlying business gives them every reason to doubt. Q3 revenue landed at $821.0 million, missing estimates by 16.84% and falling 4.57% year over year. Long-term debt has jumped from $9.6 million to $4.16 billion in twelve months, diluted share count has ballooned to 591.7 million, and the $519.4 million Bitcoin position just produced a $151.0 million loss in Q4.

The chart tells the rest. Shares trade at $22.37, down 20.25% over the past year and 45.6% over five years, carrying a beta of 1.833. Reddit sentiment whipsawed from very bullish (88) to very bearish (18) inside 24 hours on the eBay headline. Retirement capital has no business inside that washing machine.

The Opportunity Hiding In Plain Sight

The smarter chair for retirement capital is Costco (NASDAQ:COST). The case rests on three pillars.

1. A subscription moat that compounds quietly. Costco collects membership dues before a single pallet moves, and that recurring revenue is why the most recent quarter showed earnings growth of 45.5% year over year on strong revenue growth. Return on equity sits at 29.6%, the kind of capital efficiency that keeps the dividend rising and funds opportunistic special distributions.

2. Predictable price action a retiree can stomach. Shares finished at $1,021.88, up 18.84% year to date, 184.09% over five years, and 737.34% over ten years. A beta of 0.908 means roughly half the daily noise of GameStop, while Costco’s annual dividend grows on a clockwork schedule.

3. Institutional conviction backs the thesis. Twenty-two analysts carry buy or strong-buy ratings against just two sells, with a consensus target of $1,072.22. Institutions own 75% of the float, diluted trailing EPS reached 19.19, and the market has rewarded this cash-flow profile with a forward P/E of 46x for nearly a decade because the numbers actually show up every quarter.

A Worthy Second Name

Investors who want a complementary holding should put Walmart (NYSE:WMT) on the research list. The stock has returned 35.86% over the past year and 201.49% over five years, with a beta of 0.652, a return on equity of 21.8%, and an analyst lineup of 39 buy or strong-buy ratings against a single sell. The advertising business is scaling toward roughly $6 billion in high-margin revenue, and management just authorized a $30 billion buyback in February 2026. That is the kind of capital return story a retirement portfolio can build around.

Mute the GameStop and eBay drama, move Costco to the top of the retirement research file, and keep Walmart in the next slot down.

The post Forget GameStop: This Stock Is A Much Better Buy appeared first on 24/7 Wall St..

Grocery prices jumped 0.5% in April and restaurant menu prices climbed 0.7%, the biggest monthly moves in either category since late 2025. Before that, you would have to go back to 2022 to find a hotter print.

The April CPI report, released Tuesday by the BLS, showed headline inflation running at 3.8% year over year, up from 3.3% in March, the highest reading since 2023. Core CPI accelerated to 2.8%. Energy alone drove more than 40% of the monthly increase, as the Iran war and the standstill in the Strait of Hormuz keep bleeding into food, logistics, and dining costs.

The K-Shaped Squeeze

The personal savings rate fell to 3.6% in March, and University of Michigan consumer sentiment hit its lowest reading dating back to 1952. Kraft Heinz (NASDAQ:KHC) CEO Steve Cahillane told Bloomberg lower-income shoppers are “literally running out of money at the end of the month.” McDonald’s (NYSE:MCD) CEO Chris Kempczinski warned “the pressures there are going to continue.” Whirlpool (NYSE:WHR) CEO Marc Bitzer said the appliance industry is seeing a decline on par with the financial crisis. Whirlpool shares are down 41.34% year to date.

The Profit Angle

The barbell trade is back. Walmart (NYSE:WMT) has captured share across income tiers, with Walmart U.S. comp sales up 4.6% and the stock up 18.48% year to date. Its earnings report later this month is the next bellwether. Meanwhile, Kraft Heinz is committing $600 million to defend volumes that keep slipping. Watch the ceasefire, gasoline pass-through, and a Fed boxed in by sticky inflation and a still-resilient labor market.

The post Grocery and Restaurant Prices Post Biggest Jump Since 2022 appeared first on 24/7 Wall St..

The President wants rate cuts. His pick has now taken the chair at the Federal Reserve. The Senate confirmed Kevin Warsh on May 13, 2026, in a 54-45 vote, and his term officially began when Jerome Powell’s expired on May 15. Futures markets had spent weeks pricing in easing. Then the Bureau of Labor Statistics released the April Consumer Price Index report, and the door slammed shut.

The consumer price index rose at a seasonally adjusted 0.6% for the month, putting the one-year pace at 3.8%, the highest since May 2023. Core CPI accelerated in April, rising 0.4% month over month and 2.8% year over year versus March’s readings of 0.2% and 2.6%. The Fed’s preferred gauge tells the same story: headline Personal Consumption Expenditures inflation hit 3.5% year-over-year in March, with core PCE at 3.2%, both well above the 2% target the Fed has now missed for five consecutive years. The report also contained bad news for workers, as real average hourly wages slipped 0.5% for the month and fell 0.3% annually.

The Energy Shock the Fed Can’t Ignore

The proximate culprit is oil. West Texas Intermediate crude surged to around $101.56 per barrel in mid-May, near the top of its 12-month range and up from a December low of $55.44. That peak reflected the full weight of the Iran war premium. The conflict caused oil prices to spike, which then pushed up costs for gasoline, airfare, and groceries. Energy accounted for over 40% of April’s monthly CPI rise, with energy costs up roughly 4% in April after an 11% gain in March. Gasoline rose 21% in March alone, the largest monthly increase in BLS data going back to 1967.

The Fed could write off energy as transitory if the rest of the basket cooperated, but the rest of the basket is heating up too. Grocery prices rose 0.5% and dining out rose 0.7% in April, the biggest monthly jumps since late 2025. Airfares climbed 2.8%. Shelter inflation accelerated to 0.6% from 0.3%. Services inflation has held in the 3.3% to 3.6% range for months, the stickiest piece of the pie and the one that responds least to rate policy.

Meanwhile the employment side of the dual mandate offers no cover. Unemployment held at 4.3% through May 2026 and has remained in a narrow range of 4.3% to 4.5% since July 2025. A labor market this stable provides zero urgency for emergency easing. The bond market has noticed: the 10-year Treasury yield climbed from 3.97% in late February to 4.46% on May 12, a clear vote against near-term cuts, and the 10-year note finished June 12, 2026 at 4.48%, still well above its pre-conflict levels.

The K-Shaped Economy Under the Hood

The headline economy looks resilient. Underneath, lower-income households are absorbing the entire shock. The personal savings rate fell to 3.6% in March, the lowest since the revenge-spending period of 2022. Heather Long, chief economist at Navy Federal Credit Union, said: “Inflation is the key drag on the U.S. economy now. This is hurting Americans. There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains.”

Corporate America is saying it plainly. Kraft Heinz (NASDAQ:KHC) CEO Steve Cahillane told Bloomberg that customers are “literally running out of money at the end of the month” and that the company is “seeing negative cash flows in the lower-income brackets where they’re dipping into savings.” McDonald’s (NYSE:MCD) CEO Christopher Kempczinski flagged that rising gas prices are disproportionately hitting low-income consumers and that pressure is “going to continue.” Whirlpool (NYSE:WHR) CEO Marc Bitzer compared the appliance industry’s decline to the financial crisis. New York Fed research found households earning under $40,000 cut gasoline purchases by 7% in March yet still spent 12% more on gas. Walmart (NYSE:WMT) told investors in February that “wallets are stretched” for households under $50,000.

What to Watch

The Fed is holding because the data won’t let it move, not because of politics. The Committee maintained the target range for the federal funds rate at 3.50% to 3.75%, where it has sat since December 2025 after 75 basis points of cuts last fall. Warsh’s first meeting as Fed chair is June 16 to 17, and it arrives with the inflation picture still deteriorating on a year-over-year basis.

The annual inflation rate rose to 4.2% in May 2026, marking its highest level since April 2023, from 3.8% in April, in line with market expectations. That represents the third consecutive monthly acceleration in headline inflation, with energy costs jumping 23.5% year-over-year. The energy story, however, is beginning to turn. Crude oil fell toward $75 per barrel, sliding for the fifth straight session and reaching its lowest level since early March, as expectations of increased supply weighed on prices ahead of the signing of a peace agreement between the US and Iran. The two countries are scheduled to sign an interim deal in Switzerland, offering Tehran broad economic incentives including the immediate resumption of its oil exports.

That shift creates a fork in the road for the inflation outlook. If the ceasefire holds and oil normalizes through the summer, the June CPI print could show the first monthly deceleration in energy costs since January. That would give Warsh political cover to acknowledge improving conditions without committing to cuts. If the deal fractures, however, a fourth consecutive acceleration in headline CPI would make the political fight over the Fed’s independence considerably uglier heading into fall.

Editor’s note: This article has been updated to reflect Kevin Warsh’s Senate confirmation and assumption of the Fed chair role on May 22, 2026; the May 2026 CPI reading of 4.2% year-over-year (the highest since April 2023); the decline in WTI crude from its ~$101 peak to approximately $75 as a US-Iran interim peace agreement moved toward signing; the correction of the federal funds rate to its full target range of 3.50% to 3.75%; and the updated unemployment band of 4.3% to 4.5% since July 2025 per BLS data.

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The April inflation report landed with a number the Federal Reserve hoped it would never have to explain again. Consumer prices rose 3.8% year over year, the highest reading since May 2023 and a sharp jump from March’s 3.3%. Since then, the May CPI came in even hotter: up 4.2% over the prior year, the fastest pace in more than three years, as the energy shock shows no sign of fading.

Energy did most of the initial damage. Gasoline surged 21% in March, the biggest monthly increase in data going back to 1967, and energy accounted for more than 40% of April’s CPI rise. WTI crude, which spiked to $114.58 on April 7, has pulled back to around $85 a barrel in mid-June as reports of a possible US-Iran peace agreement circulate, though traders remain cautious about whether a deal will hold. The Iran war shock is now embedded in the broader price level.

The Fed’s Bind Is No Longer Theoretical

This is the scenario the Fed has quietly been dreading. Inflation has run above the 2% target for five straight years, and core CPI is accelerating on its own: 2.8% year over year in April, up from 2.6% in March, with the monthly reading doubling to 0.4%. The energy shock is bleeding into everything else. Grocery prices rose 0.5% in April, restaurants 0.7%, airfares 2.8%, among the biggest monthly surges in those categories since late 2025. Beef alone is up 14.8% over the past year. And real average hourly wages slipped 0.5% for the month and fell 0.3% annually, meaning workers are losing ground even as prices climb.

One caveat: shelter prices rose 0.6% in April, up from 0.3%, but that reflects a statistical distortion. Last year’s government shutdown compressed a year’s worth of rent-survey updates into a six-month window, creating an outsized print. Underlying housing dynamics are largely unchanged.

The labor market gives the Fed no room to maneuver. Unemployment held at 4.3% in May, unchanged for several months, while the economy added 172,000 jobs, more than double the 85,000 economists had expected. Q1 GDP came in at 2.0% annualized. Retail sales hit $752.1B in March, up 2.4% on the month. The Fed has held the funds rate at a target range of 3.50% to 3.75% across three consecutive meetings in January, March, and April 2026, after cutting 75 basis points over the prior three months. It cannot cut without re-igniting inflation, and it cannot hold indefinitely without crushing what remains of lower-income consumer spending.

The question of who steers monetary policy through this bind is now settled. Kevin Warsh was sworn in as the 17th chair of the Federal Reserve on May 22, 2026, replacing Jerome Powell. Warsh inherits a deeply divided committee: the April FOMC meeting produced four dissents, the most fractured vote since 1992, with some members pushing for a formal two-sided policy statement that would keep rate hikes explicitly on the table. Markets currently assign less than a 10% probability to any rate move at all in 2026.

The post The Fed’s Worst-Case Scenario Is Quietly Unfolding appeared first on 24/7 Wall St..

Voice and agentic AI specialist SoundHound AI (NASDAQ:SOUN) just delivered its sixth straight earnings beat, and our model has digested the results. Here is where the 24/7 Wall St. price target lands.

Our price target for SoundHound is $17.91, implying 85.98% upside from the current $9.63 share price. Our recommendation is buy with a moderate confidence level of 50%, reflecting the wide range of credible outcomes for a high-beta AI growth name still operating at a loss.

24/7 Wall St. Price Target Summary

A Volatile Run Into Record Q1 Numbers

SoundHound has whipsawed traders. Shares climbed 20.98% in the past week and 43.73% over the past month, yet the stock is still down 3.41% year to date and sits 34% off the 52-week high of $22.17 with a 52-week low of $5.83.

The catalyst is a clean Q1 FY2026 print. Revenue hit $44.2 million, up 52% YoY, with the core automotive and IoT vertical growing 88% organically. EPS came in at -$0.06, the sixth consecutive consensus beat.

Management reaffirmed FY2026 revenue guidance of $225 million to $260 million and projected at minimum $350 million to $400 million in FY2027 once the LivePerson acquisition closes in the second half of 2026.

The Case for $22 and Higher

Bulls have a real script. The LivePerson (NASDAQ:LPSN) deal targets a $500 million combined revenue opportunity serving 25 of the Fortune 100, while OASYS, the new self-learning agentic AI platform, opens enterprise budgets.

Recent wins include a 7-figure Japanese OEM commitment, integration across Walmart (NYSE:WMT) Walmart’s ONN TV brand, and expansion with one of the world’s largest banks across 100 global markets. H.C. Wainwright carries a $20 price target and Cantor Fitzgerald is at $15. Our bull case lands at $22.77.

What Could Go Wrong

SoundHound burned $26.3 million in operating cash during Q1, and GAAP gross margin compressed 5.4 percentage points to 31.1% on vendor true-up costs. A P/S ratio of 21.4x against an industry average of 3.4x leaves no margin for execution slips.

Bulls would counter that the gross margin hit was a one-time vendor adjustment, that non-GAAP gross margin was 60.5% in Q4 2025, and that $215.6 million in cash funds the runway. Still, our bear case sits at $14.11 if LivePerson integration slips or AI multiples compress.

The Bottom Line on SoundHound

My price target of $17.91 implies meaningful upside, and the recommendation is buy at 50% confidence. The factor that tips the scale is the FY2027 revenue ramp toward $350 million to $400 million.

The bull thesis strengthens if LivePerson closes on schedule and OASYS lands at least one new Fortune 100 logo by year end. The thesis weakens if cash burn widens beyond Q1 levels or FY2026 guidance gets trimmed.

SoundHound Price Prediction 2026-2030

Looking further out, here is where our model projects SoundHound could trade, assuming current growth and margin trajectory hold.

These projections assume SoundHound executes on the LivePerson integration and sustains agentic AI traction. Significant upside or downside could result from enterprise AI multiple shifts or a slowdown in voice AI adoption.

The post We’re Bullish on SoundHound With Six Straight Earnings Beats appeared first on 24/7 Wall St..

The cooldown period for the broad basket of AI stocks, especially the semiconductors, appears to have ended, thanks in part to the rise of agents and powerful frontier models like Anthropic’s Claude Mythos. As we move into a phase of the AI boom that goes beyond just large language models or image generators, where AI could become exponentially more useful, perhaps it’s no surprise that investors are rushing back into the semi stocks.

Why bother picking and choosing stocks at another layer when the semis are standing behind the next wave(s)? Of course, after the latest surge in semi stocks, I do think that the valuation has become a tad on the excessive side. For the most part, it felt like explosive AI chip demand was already baked in going into the year. Since the latest run-up, it feels a tad excessive, even if the next leg does manage to shock and awe.

In any case, as agentic AI paves the way for digital labor and automation while completely gutting the software industry, all while world models and physical AI come into their own, I think it’s time to consider where the puck could head next. The semis might stand out as obvious winners in the next phase, but the problem, at least in my view, is that they’re already priced like massive winners.

Whenever you’re buying unstoppable names that can do no wrong, you could run the risk of overpaying. In this piece, we’ll look at candidates that actually have the power to level up their fundamentals at the hands of more powerful AI. While some names might be getting up there in price, I still think there’s far less hype compared to some of the more obvious winners at the lower levels of the AI stack.

Amazon

If embodied AI really is the next big leap, Amazon (NASDAQ:AMZN) could be the Magnificent Seven name to own. Arguably, the company is already in the fast lane when it comes to rolling out the fleet of robotic laborers in the warehouse. As Amazon looks to automate everything from coding to delivery itself, I see the company as having the most ground to gain on the operating margin front.

The company isn’t just exploring possibilities, it’s putting physical AI to work. And with $200 billion in CapEx for the year, Amazon is spending a bit more than its Mag Seven peers. Once the script flips and investors start pounding the table for more, not less, CapEx, I think Amazon is poised to shine bright. Beyond physical AI, Amazon also has a strong horse in the AI chip race with silicon like Trainium and Inferentia.

Add AWS and the satellite connectivity growth engines into the equation, and I think Amazon stock is one of the bargains hiding in plain sight as the AI boom gets physical. The stock goes for just 32.1 times trailing price-to-earnings (P/E) right here despite soaring 35% in the past three months.

Walmart

In case you missed it, Walmart (NASDAQ:WMT) is now on the Nasdaq because it is, in fact, becoming more and more like an AI tech play by the day. Like Amazon, Walmart’s a massive retailer that’s been betting big on the rise of warehouse robots.

The company’s Symbiotic (NASDAQ:SYM) stake makes Walmart a firm that will not be left behind as warehouse automation becomes one of the next big sources of operating margin gains. The efforts and big bet in physical AI aren’t just to please Wall Street, though. The firm is cutting away at fulfillment costs, and I think the market might still be underestimating a company that’s already shown it can successfully pivot in the new era of retail.

Of course, the 44.0 times forward P/E multiple is getting a bit steep. Unlike Amazon, the retailer isn’t pouring $200 billion in CapEx for the year. And with its physical retail presence and grocery exposure acting as a huge moat source, especially in this inflationary environment, perhaps investors are right to reward Walmart in this climate. In short, it’s a defensive that’s also going on the offensive on AI.

The post AI’s Next Leg Might Be Bigger Than Anyone Thinks — and These 2 Stocks Are Quietly Positioning for It appeared first on 24/7 Wall St..

RBC Capital analyst Steven Shemesh raised the firm’s price target on Target (NYSE:TGT) stock to $132 from $130, maintaining an Outperform rating ahead of next week’s Q1 FY2026 earnings report. The firm stated it is “cautiously optimistic that turnaround efforts are beginning to resonate with the consumer.”

A $2 bump rarely moves the needle on its own. The story here is timing and tone: RBC nudged higher before the report on a name that has been a multi-year turnaround project, hinting that the bar for Q1 is rising.

The Analyst’s Case

Shemesh’s “resonating with the consumer” phrase reflects momentum building since late last year. Target closed Q4 FY2026 with adjusted EPS of $2.44, beating consensus of $2.16 by 13%, while gross margin expanded 40 basis points to 27%.

CEO Michael Fiddelke also noted that “Target saw a healthy, positive sales increase in February, serving as an important milestone on our path back to growth this year.” RBC appears to be leaning into that signal, plus growth in non-merchandise revenue, which rose more than 25% on Roundel ads, marketplace, and membership.

Company Snapshot

Target operates nearly 2,000 stores across the U.S., with brands spanning Target Circle, Target Circle 360, Roundel, and Drive Up. The company carries a market capitalization near $57.2 billion and just declared its 235th consecutive quarterly dividend.

Management guided FY2026 EPS to $7.50 to $8.50 and projected net sales growth in every quarter of 2026. For Q1, the company expects EPS flat to up slightly versus prior year’s adjusted $1.30.

Why the Move Matters Now

The catch with this analyst upgrade is that Target stock has already run hard. Shares were up roughly 32% year-to-date as of last week, so the turnaround thesis may be partly priced in.

Target trades at a P/E ratio of 16x with a 3% dividend yield and a 3.47% dividend yield. Consensus sits at $126.03, so RBC’s $132 target carries the firm above the Street average.

What It Means for Your Portfolio

The bull case for Target stock rests on continued margin recovery, traffic stabilization, and the high-margin Roundel and membership engines compounding. The apparel refresh and home category investments are central to defending Target’s “discount with style” positioning. For broader context on retail analyst action, see our recent roundup of analyst upgrades and downgrades.

The bear case is real. Comparable store sales still declined 4% in Q4, transactions fell 3%, and consumer trade-down continues to favor Walmart (NYSE:WMT) and off-price competitors like TJX Companies (NYSE:TJX).

For prudent investors, the analyst upgrade signals that Wall Street sentiment is warming. With expectations now elevated heading into Q1, a measured TGT stock position size could let long-term holders participate while leaving room to add if the report disappoints.

The post RBC Raises Price Target on Target to $132 Ahead of Q1: Is the Turnaround Finally Resonating? appeared first on 24/7 Wall St..

From Big-Box King to Omnichannel Powerhouse

A decade ago, Walmart (NYSE: WMT) was widely viewed as the cautionary tale of physical retail. Amazon was eating its lunch, eCommerce was an afterthought, and the stock traded sideways for years. What followed was one of the more underappreciated turnarounds in large-cap retail.

The pivot started with the 2016 Jet.com acquisition, accelerated through the 2018 Flipkart deal in India, and crystallized with the 2020 launch of Walmart+. The pandemic poured fuel on digital adoption, and Walmart leaned in. By FY26, eCommerce reached 23% of Walmart U.S. sales, with store-fulfilled fast delivery reaching 95% of U.S. households in under 3 hours.

Equally important is the high-margin business stack built underneath the retail engine: an approximately $6.40 billion advertising run rate, growing 37% year over year, double-digit membership growth, marketplace, and fulfillment services. The VIZIO acquisition deepened the connected-TV ad layer. A 3-for-1 stock split in February 2024 and the CEO transition from Doug McMillon to John Furner bookended the decade.

$1,000 Turned Into Roughly $6,860

Here is what a $1,000 stake would look like across standard horizons, using split-adjusted prices through May 5, 2026.

Those figures track price appreciation on an adjusted basis. Layer in reinvested dividends and the five-year and 10-year totals climb meaningfully higher, since Walmart paid a steady, rising quarterly check the entire way. The S&P 500 advanced solidly across each window as well, but Walmart comfortably outpaced the index over five and 10 years, with the 10-year stretch easily surpassing typical broad-market returns. Holding through it required tolerating long flat periods between 2015 and 2018 and a sharp 2022 drawdown.

A Prospective Dividend King in the Making

Walmart has now raised its dividend for about 50 consecutive years, placing it on the threshold of Dividend King status. The latest quarterly payout is $0.2475, up from $0.235 the prior year, with the next pay date on May 26, 2026 (ex-date May 8). Management also authorized a new $30 billion buyback in February 2026.

Weighing the Buy Case With Eyes Open

The bull case rests on the advertising, membership, and marketplace flywheel continuing to compound operating income faster than sales, the way it did in Q4 FY26, when adjusted operating income grew 10.8% against 5.6% revenue. The FY27 guide for $2.75 to $2.85 in adjusted EPS is credible given the trajectory.

Valuation is the main pushback. A P/E ratio near 48 for a retailer with a 3.1% net margin leaves little room for a tariff shock, FX headwinds, or a consumer slowdown. The 0.7% dividend yield offers a thinner income stream than at lower price points.

The business quality is difficult to dispute; the entry price remains the sticking point for investors considering a position today.

The post Walmart Has Rewarded Patient Investors: A Prospective Dividend King’s Long-Term Payoff appeared first on 24/7 Wall St..

Shares of Target (NYSE:TGT) are changing hands near $129 in midday trading Tuesday, up 1% on the session and sitting on a year-to-date gain of 32%. That run has turned the longtime laggard into the surprise leader of the big-box pack in 2026.

By comparison, Walmart (NASDAQ:WMT) stock is up 18% year to date and Costco Wholesale (NASDAQ:COST) stock is also up 18%. Target stock has nearly doubled the return of either rival, a sharp reversal from the multi-year stretch when it badly trailed both peers.

The horse race tells a bigger story about consumer rotation, valuation digestion at the top of the sector, and a turnaround narrative that has finally caught a real bid heading into the summer months. The spread among the three names is now wider than it has been in years.

Target Leads After Years of Lagging

Target’s Q4 FY2026 report on March 3 set the tone. Adjusted EPS came in at $2.44 against a $2.16 consensus, a beat driven by margin recovery rather than a top-line snap-back. Revenue still slipped 2% year over year to $30.45 billion.

What got investors interested was the mix shift. Target’s gross margin expanded 40 basis points to 26.6%, non-merchandise revenue jumped more than 25%, and same-day delivery via Target Circle 360 grew over 30%.

New Target CEO Michael Fiddelke guided FY2026 sales up roughly 2% with EPS of $7.50 to $8.50. Fiddelke called February “a healthy, positive sales increase… an important milestone on our path back to growth this year.” Even after the rally, Target stock is still down 39% over five years, leaving the recovery setup intact.

Walmart: Premium Operator, Premium Multiple

Walmart’s Q4 FY2026 results showed the model still firing: revenue of $190.66 billion beat estimates, global eCommerce grew 24%, and the board authorized a fresh $30 billion buyback alongside a dividend increase to $0.99 per share. Yet, Walmart shares have only matched the broader retail tape this year.

The pushback is based on Walmart’s valuation. With a P/E ratio of 47x, Walmart stock has been the subject of sustained skepticism on Reddit, where one widely viewed r/WallStreetBets post asked, “Someone ****ing explain why Walmart ($WMT) is at 47x earnings?”

Premium multiples leave less room for upside surprise. Walmart’s operational execution is arguably the best in retail, but the stock is already paid for that excellence at current levels.

Costco: Strong Fundamentals, Valuation Digestion

Costco’s Q2 FY2026 report delivered revenue of $69.6 billion, up 9% year over year, with comp sales up 7% and digital comps up 23%.

Membership fee income climbed 14% to $1.35 billion. Moreover, Costco’s renewal rates held at an impressive 90%.

The catch is that Costco stock’s one-year return is essentially flat, which is unusual for a name that has compounded relentlessly. A March r/stocks thread captured the tension, asking, “If 35x earnings felt wild for Costco, how are we supposed to feel about 50x?”

The fundamentals at Costco are pristine. The multiple is doing the digesting, and this is showing up in the relative scoreboard.

What the Spread Could Signal

Consumer sentiment sits at 53.3 in the latest University of Michigan reading, deep in pessimistic territory. Yet, BEA data shows total personal consumption still climbing in early 2026, with clothing spend rising sequentially from 574.4 to 589.6 billion from January through March.

That mix favors discount-leaning, discretionary-exposed names that had already been beaten down. Target’s setup fit that profile perfectly. Walmart and Costco entered the year priced for excellence, while Target entered priced for further disappointment.

Investors revisiting recent big-box retail outlooks for the back half of 2026 have seen the rotation play out in real time. Capital is quietly cycling from defensive premium names into the recovery story.

What to Watch

Target’s Q1 FY2026 report is the next major checkpoint, and Fiddelke’s commentary on whether February’s positive comparable sales extended into March and April will likely set the tone for traders. Watch for whether the gap between Target and its peers narrows or widens into the release.

For Walmart and Costco stockholders, the question is simpler: does multiple compression continue, or do operating results justify the premium? Year-to-date scoreboards reset every January, but the spread between these three has rarely been this wide, and the next few earnings cycles will decide whether Target’s lead is durable or simply a snap-back.

The post Which Big-Box Store Chain Has Dominated 2026: Walmart, Target, or Costco? appeared first on 24/7 Wall St..

Consumer sentiment sits at 53.3 in March 2026, deep in the pessimistic zone, while retail sales just hit a fresh high of $752.1 billion. That gap between how Americans feel and how much they spend is the entire reason a fund like the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP) exists. People grumble, then they buy toilet paper, soda, and a rotisserie chicken anyway.

XLP holds the companies that capture those routine reflex purchases.

What XLP Is Actually Built To Do

XLP launched on December 16, 1998 and tracks the Consumer Staples Select Sector Index, which carves the staples slice out of the S&P 500. The expense ratio is microscopic and the dividend yield runs 2.8%, paid quarterly from a basket that is 100% U.S.-listed.

The portfolio role is straightforward. You hold XLP because you want exposure to demand that does not flinch when the cycle turns. Consumer Staples Distribution & Retail makes up 33.64% of the fund, Beverages 19.25%, Food Products 17.15%, Household Products 16.27%, Tobacco 10.23%, and Personal Care 3.45%. There is no tech, no banks, no airlines. The return engine is mundane and durable, repeat-purchase cash flows compounded by pricing power and dividends.

The businesses inside back that up. Walmart (NYSE:WMT) closed FY26 with $713 billion in revenue, 5% growth, and a 23% return on equity, and just authorized a $30 billion buyback in February 2026. Costco (NASDAQ:COST) renewed 89.7% of its 82.1 million paid memberships last quarter, a recurring revenue stream most software companies would envy. Procter & Gamble (NYSE:PG) just raised its payout for the 70th consecutive year on a dividend streak that started in 1890, and runs 23.1% operating margins.

The Defensive Math

XLP is up 8% year-to-date and 5% over the past year, against SPY’s 26.7% one-year and 5.3% YTD. Stretch the lens and the gap widens. XLP returned 37% over five years and 105% over ten, while SPY returned 73% and 249%. A retiree who parked $100,000 in XLP a decade ago has roughly $200,000. The same dollars in SPY became closer to $350,000.

That is the staples tax. You are buying a smoother ride and a bigger yield in exchange for missing the AI rally, the cloud rally, and whatever rally comes next.

Holdings tell the same story. Walmart returned 33% over the past year, but P&G is down 8% and Costco managed only 1%. The fund delivers averages.

Three Tradeoffs Worth Naming

1. Valuation creep at the top. Walmart now trades at a P/E of 48x and Costco at 53x. Reddit users in r/wallstreetbets are openly asking why Walmart sits at 47x earnings. Defensive does not mean cheap.
2. Tariff and input cost exposure. P&G is absorbing roughly $400 million in after-tax tariff costs and another $150 million in commodity headwinds in FY26, which is why the company guided toward the lower end of its $6.83 to $7.09 core EPS range.
3. Concentration risk. The top five holdings carry roughly 41% of the fund. If Walmart or Costco stumbles, the “diversified” staples ETF stumbles too.

XLP fits best as a 5-15% defensive sleeve for investors who want yield, lower volatility, and exposure to brands that print cash through pessimism cycles. Anyone benchmarking against the S&P 500 in a growth-led market will find the underperformance hard to stomach.

The post This Boring ETF Owns Some Of The Toughest Businesses In America appeared first on 24/7 Wall St..

On April 14, 2025, we argued that Visa (NYSE: V) would overtake Walmart (NYSE: WMT) in market cap within five years. Both have now reported full fiscal years, with Visa’s Q1 FY2026 landing on January 29, 2026, while Walmart posted FY26 on February 19, 2026. Turns out, the gap widened.

The One-Year Scoreboard Isn’t Close

Walmart is worth roughly $1.04 trillion, while Visa’s is near $598 billion. The retailer roughly doubles the payments network.

The retailer’s Q4 revenue hit $190.66 billion, with global eCommerce up 24% and advertising up 37% on VIZIO integration. Full-year ad revenue neared $6.4 billion. Expedited delivery now reaches 95% of U.S. households in under three hours. New CEO John Furner called retail’s pace of change “fast, convenient, and personalized.” Tariff fears pushed shoppers toward value, and Walmart absorbed the traffic while protecting margin, with gross margin up 13 basis points.

Fundamentally, Visa executed. Q1 FY26 net revenue rose 14.6% to $10.90 billion, data processing revenue jumped 17%, and cross-border volume climbed 11%. Ryan McInerney described Visa as a “payments hyperscaler.” The stock ignored it. Reddit sentiment went cold after the February headline “Europe’s $24 Trillion Breakup With Visa and Mastercard Has Begun”, and interchange MDL provisions have now totaled $3.213 billion across four quarters. Regulation reset the multiple.

Why the Call May Be Merely Delayed

The margin story holds. Visa’s operating margin is still 68.3%. Inflation pass-through worked, with payments volume up 8%. What broke was the deregulatory assumption. EU alternatives, a proposed U.S. credit card rate cap, and ongoing multidistrict litigation costs turned the regulatory backdrop hostile. Walmart’s operational leverage also surprised to the upside. Adjusted operating income grew 10.8% in Q4, outpacing sales.

The prediction was wrong through year one, clearly. The gap widened from roughly $100 billion to nearly half a trillion. That said, the case may still have legs. Walmart trades at 44x forward earnings with 3.07% profit margins, while Visa earns 54% and trades at a steep discount to its own history. For investors prioritizing ballast through tariff noise, Walmart’s operational execution stands out. For those weighing regulatory overhang against a higher-quality business at a reset price, Visa screens more attractively today than it did at $332. While the timing of the five-year projection may not hold up, the case for Visa to overtake Walmart in market cap could still come to pass.

The post One Year Later: We Predicted Visa Would Overtake Walmart. Here’s Where That Stands. appeared first on 24/7 Wall St..

If you’re looking for monthly dividends with high yields, there are more ways to derive that income without chasing significant risk. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), Colterpoint Net Lease Real Estate ET (NYSEARCA:NETL), and VanEck Preferred Securities ex Financials ETF (NYSEARCA:PFXF) can get you $1,000 monthly on an investment of ~$230,000.

The three ETFs have an average yield of 5.19%. This works best if you are someone who already owns a home and needs a little extra to get by. It also works if you’re already sitting on significant amounts of cash and you’re not comfortable dipping your toes into risky equities or covered call ETFs.

Better yet, the ETFs below also come with some upside on top. Let’s take a look.

iShares 20+ Year Treasury Bond ETF (TLT)

TLT buys and holds U.S. Treasuries, a 20-year-plus treasury. It collects the coupons and passes them to you monthly for a 0.15% expense ratio. TLT is boring, and I’d argue very safe. It can swing somewhat in both directions depending on interest rate hikes and cuts, but the underlying asset is rock-solid as Treasuries are backed by the U.S. government.

The most special characteristic of TLT is that it tends to soar significantly during recessions, as downturns often invite interest rate cuts. Since interest rates go down, the long-term (and high-yield) Treasuries owned by TLT become much more valuable. This is what caused TLT to rise from the $90s to over $122 in 2008. TLT is currently trading around $86, and I don’t see significant downside risk.

I either see a rapid gain from here if there’s a recession, or a slow climb upwards as interest rate cuts eventually make these long-term Treasuries more valuable. Analysts do expect that interest rates may be raised a little this year if inflation comes in higher, but that’s unlikely to happen. And even if it does, it won’t have a big impact on TLT.

All in all, you get a 4.5% yield and ~40% upside potential in the next 24 months. If there’s a deep recession, it could even eclipse its 2020 peak of over $170.

Colterpoint Net Lease Real Estate ETF (NETL)

The Colterpoint Net Lease Real Estate ETF holds REITs that follow the NET lease business model. A “net lease” is an arrangement that requires the tenant to pay all or a portion of the taxes, fees, and maintenance costs for a property in addition to rent. In the most common flavor, the triple net lease, the tenant pays all three, which means the landlord collects rent and essentially nothing else touches the income statement.

Thus, these net lease REITs are the closest thing public real estate has to a bond. They sign a 15 or 20-year lease with a creditworthy tenant like Walmart (NASDAQ:WMT)​​​, FedEx (NYSE:FDX), or a regional grocer, collect predictable rent with contractual escalators built in, and then distribute the cash.

The entire real estate sector has had a lot of fear baked in due to rising interest rates, but the worst-case scenario never ended up materializing. Real estate prices are nowhere near balloon levels, and these companies have already applied lessons from 2008 to prevent a repeat.

I expect NETL to eventually make a recovery to its peak and deliver 25-30% upside. In the meantime, you can cash the 4.69% yield. The expense ratio is on the higher side at 0.60%, or $60 per $10,000.

VanEck Preferred Securities ex Financials ETF (PFXF)

Preferred stocks sit between normal stocks and bonds, and companies issue them not to dilute their common stock. These stocks are prioritized in the unlikely case a company falls. Most importantly, these preferreds come with fat yields to woo investors who would’ve chosen Treasuries instead.

PFXF buys a basket of these preferreds, but it does so with a very smart overlay. The PFXF ETF excludes preferreds from financial companies, and I believe this makes it a lot safer in the current environment. Financial companies are the most prolific issuers of these stocks. These businesses tumble first in a recession, and they’re massively lending to risky AI startups.

PFXF now gets you a 6.35% dividend yield with an expense ratio of 0.40%. It is up 16.5% in the past year already, independent of those dividends.

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Dividend growth investing rewards patience like few other strategies. The income stream compounds year after year, and the companies behind those dividends tend to be high-quality and structurally durable.

With the Fed Funds rate at 3.75% and the 10-year Treasury yielding around 4.30%, dividend-focused equity funds must now compete against risk-free alternatives that offer meaningful real yields. The three ETFs below each take a different approach to this challenge. They reflect distinct portfolio philosophies and offer different interpretations of what “dividend growth” actually means in practice.

NOBL: The Strictest Definition of Dividend Commitment

ProShares S&P 500 Dividend Aristocrats ETF (NYSEARCA:NOBL) applies the most demanding standard of the three funds. To qualify, a company must have raised its dividend for at least 25 consecutive years, a threshold that eliminates most of the S&P 500 and concentrates the portfolio in businesses that have navigated recessions, rate cycles, and competitive disruptions without cutting their payout.

The resulting portfolio leans heavily toward Consumer Staples (23%) and Industrials (19%), sectors populated by companies with pricing power and relatively stable cash flows. Names like Exxon Mobil, Chevron, Caterpillar, and Johnson & Johnson help anchor the fund. The index uses equal weighting across 75-plus positions, so no single holding dominates. No single holding exceeds roughly 2% of the portfolio weight, which limits single-stock risk relative to market-cap-weighted alternatives.

NOBL’s dividend history illustrates the compounding effect the fund is designed to deliver. The fund paid $0.134373 per share in its first distribution in December 2013. By December 2025, that quarterly figure had grown to $0.66119. The fund carries a 2.14% dividend yield and an expense ratio of 0.35%. On a price basis, NOBL has returned about 13% over the past year and roughly 151% over the past 10 years.

The tradeoff is sector concentration risk on the downside and limited technology exposure on the upside. Information Technology represents just 3% of the fund, which means NOBL participates less in tech-driven market rallies. Investors who want the strictest possible screen for dividend durability accept that constraint.

VYM: Scale and Yield at Near-Zero Cost

Vanguard High Dividend Yield ETF (NYSEARCA:VYM) takes a different approach entirely. Rather than requiring a multi-decade streak of dividend increases, VYM tracks the FTSE High Dividend Yield Index, which selects stocks based on current yield. The result is a much broader fund with over 560 holdings, a 2.29% dividend yield, and an expense ratio of just 0.04%.

That expense ratio is the lowest of the three funds by a wide margin, and over a 20-year holding period, the compounding effect of that cost difference is substantial. VYM also commands the group’s largest asset base, at nearly $88.7 billion, reflecting both its age (launched in November 2006) and Vanguard’s distribution reach.

The portfolio skews toward Financials, which represent 19% of the fund, followed by Technology at 15% and Healthcare at 13%. Broadcom is the largest single holding at 6%, and the only one over 4%, an unusually large position that reflects the stock’s elevated yield relative to the broader market. JPMorgan Chase, Exxon Mobil, Johnson & Johnson, and Walmart round out the top five.

VYM’s income record is long and consistent, with quarterly distributions having grown from $0.175 in 2006 to $0.8617 in the most recent quarter (March 2026). Price performance has been strong: up about 28% over the past year and nearly 199% over ten years, the best total return of the three funds over that horizon.

The caveat here is that yield-based selection does not guarantee dividend growth. A company can have a high yield because its stock price has fallen rather than because of a strong history of raising payouts. VYM’s breadth dilutes this risk, but investors focused specifically on dividend growth trajectories rather than current income levels may find NOBL’s stricter screen more aligned with their goals.

DGRW: Quality Screen Built for Long-Term Compounders

WisdomTree U.S. Quality Dividend Growth Fund (NASDAQ:DGRW) is the most growth-oriented of the three. WisdomTree screens for earnings growth and return on equity in addition to dividend growth history, which pulls the portfolio toward companies with the financial capacity to keep raising payouts rather than just those with an existing track record of doing so.

That quality screen produces a portfolio that looks distinctly different from NOBL and VYM. Information Technology accounts for 25% of the fund, with Apple at about 5%, NVIDIA also at 5%, and Microsoft at 4%.  Alphabet also appears in two share classes that together represent roughly 5% of the portfolio. This is a dividend fund that holds the largest technology companies in the world because they meet the earnings-quality and dividend-growth criteria, not in spite of them.

The income mechanics are also distinct. DGRW pays dividends monthly, and the annual total has grown from $1.20 per share in 2024 to $1.26 in 2025. The current dividend yield is 1.35%, the lowest among the three funds, but that reflects the portfolio’s growth orientation. The fund’s ten-year price return of about 258% is the highest of the group, suggesting the quality-growth combination has generated a strong total return even if the current income rate trails VYM and NOBL.

The fund carries an expense ratio of 0.28% and holds just under 200 positions. The trade-off is that heavy technology concentration makes DGRW more sensitive to tech-sector volatility than either of the other two funds. Investors who want dividend-growth exposure alongside meaningful participation in large-cap technology earnings power will find the portfolio construction here better aligned with that objective.

Choosing Between the Three

NOBL is distinguished by the purity of its dividend commitment: every holding has raised its payout for at least 25 years, and the equal-weighted structure prevents any single name from dominating the outcome. VYM offers the broadest possible high-yield exposure at the lowest possible cost, backed by a 20-year track record of income. DGRW pairs dividend growth with quality-earnings screens and carries meaningful technology concentration, alongside higher long-term total-return potential.

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