Walmart (WMT) investors got caught asleep at the switch. 

Shares logged there worst day in more than a year on Thursday, tanking 6.23% as the retailer surprised investors with a weak 2025 outlook. Shares were relatively unchanged in pre-market trading on Friday.

The session was a new, unwelcome development in the Walmart story. 

For much of 2025, Walmart investors only saw a stock price that went up and to the right as it consistently beat analyst profit estimates and raised guidance. The impressive 2024 run has taken shares to a rich valuation of 37 times estimated forward earnings, a stiff premium relative to the 22 times afforded the S&P 500. 

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But with tariff and consumer spending concerns swirling, Walmart's profit outlook were lacking.

The company projected full year EPS of $2.50 to $2.60 a share. Analysts were modeling for $2.76 a share.

"We're not immune to this [tariffs], but we typically will work with suppliers on this. We'll shift supply where we need to. We can lean into our private brands. There's a lot of tools that we have that to try to keep those prices low for customers," Walmart CFO John David Rainey told Yahoo Finance.

The Street has largely defended Walmart's stock in the aftermath of the sell-off, opting to reiterate bullish ratings and price targets. EPS estimates have started to trend lower, Yahoo Finance data shows, but still remain well above the company's guidance.

"This company is consistent, and the consumer is consistent, so it's [Walmart] well positioned for a beat-and-raise," TD Cowen analyst Oliver Chen said on Yahoo Finance's Morning Brief. "We certainly like it for the longer term."

Here's what Wall Street is whispering about after the 2025 outlook from Walmart. 

Citi analyst Paul Lejuez

• Rating: Reiterated Buy

• Price Target: $120, reiteration

"The “Walmart winning” theme continues, though high market expectations and 2025 guidance that was weaker than consensus weighed on the stock. But nothing has changed. Walmart US continues to gain share in all income cohorts (though led by higher income consumers), driven not only by Walmart's mindshare for value but also its convenience. Higher growth businesses such as marketplace, fulfillment and advertising are increasingly contributing to profits and will help drive margins in the future (and we believe Walmart can exceed historical peak EBIT margins). We believe 2025 guidance will prove conservative as was the case in 2024, and believe Walmart is positioned to outperform in the uncertain macroeconomic environment."

Jefferies analyst Corey Tarlowe

• Rating: Reiterated Buy

• Price Target: $120, reiteration

"As the value leader in retail, we believe Walmart is well-positioned in the present environment. We believe Walmart US will continue to gain share, trade-down continues, and private label penetration grows."

JPMorgan analyst Christopher Horvers

• Rating: Reiterated Overweight

• Price Target: $112, reiteration

"Reaction worse than reality, we’d defend the shares as Walmart controls the margin throttle. Objectively, we think the Walmart story is largely intact with the glass half full vs. half empty debate a question of how you view reinvestment. Indeed, as has been the case all year, the upside has largely been traditional retail drivers (e.g., sales, inventory management supply chain) vs. the alternate profit pools remaining relatively more modest in driving margin expansion. This is not to say that progress in the “second P&L” isn’t continuing. Indeed, we note advertising revenue growth remaining strong, Walmart Fulfillment Services turning contribution margin positive, the company breaking out “membership and other income” by segment showing Walmart US up >30% in the fourth quarter, Walmart US eCommerce losses improving by 80% vs. last year, and Walmart now offering 93% population coverage on same day/next day with consumers paying up for 1-3 hour delivery."

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Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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