Walmart Earnings Beat & Guidance Upgrade Contrast With Target's Poor Performance

2025-11-21 (EST) | 2025-11-22

Walmart Inc. (NYSE: WMT) raised its full-year sales and earnings forecasts on November 20, 2025, following stronger-than-expected Q3 FY26 results. The retailer cited resilience across income cohorts as a key driver, contrasting with peer Target Corporation (NYSE: TGT), which cut its 2025 earnings guidance amid soft demand and operational challenges [3][6].

Walmart’s Q3 performance included:

• Total revenue: $179.5 billion (+5.8% YoY)
• Adjusted EPS: $0.62 (beat consensus estimates)
• Net income: $6.14 billion (+33% YoY) [1][3]

Target’s concurrent guidance revision:

• 2025 adjusted EPS cut to $7–$8 (from original $8.80–$9.80 range)
• Comparable sales contracted more than expected in Q3 [6][8]

• Walmart:
  Stock rose 2.9% intraday on November 20 post-earnings but reversed course on November 21, closing at $105.32 (-2.46%) with elevated volume (41.38M shares vs. 16.26M average) [0][3]. This mixed reaction likely reflects profit-taking and valuation concerns.
• Target:
  Shares fell 2% following its guidance cut, highlighting investor skepticism about its turnaround strategy [7].

Walmart’s guidance upgrade (net sales growth 4.8–5.1% vs. prior 3.75–4.75%) signals confidence in holiday season performance, but Target’s struggles underscore ongoing retail sector headwinds [4][10]. The divergence suggests Walmart’s value proposition and operational efficiency are resonating with consumers amid economic uncertainty [3].

Metric	Walmart (WMT)	Target (TGT)
Q3 Revenue Growth	+5.8% YoY	Not disclosed (comparable sales down)
2025 Adjusted EPS Guidance	$2.58–$2.63 (upgraded)	$7–$8 (downgraded)
P/E Ratio (TTM)	36.83	N/A (calculated post-guidance: ~10–11x)
Volume (Nov 21)	41.38M	N/A
Market Cap	$839.70B	N/A

Sources: [0][1][3][6][8]

• Directly Impacted:
  WMT, TGT
• Related Sectors:
  Big-box retail, consumer staples
• Supply Chain:
  Upstream suppliers (consumer packaged goods, groceries) to Walmart may benefit from increased demand [1][3]

• Root cause of Walmart’s November 21 price decline (macro sell-off vs. specific news)
• Sustainability of Walmart’s margin expansion amid rising labor costs
• Target’s ability to execute its $5B capital spending plan to reverse trends [7]

Walmart’s strength in attracting higher-income shoppers (per CEO comments [3]) and operational efficiency contrast with Target’s merchandise strategy struggles [10].

• Valuation Risk:
  Walmart’s P/E ratio (36.83x) is significantly above historical averages, posing downside risk if earnings growth slows [0].
• Sector Headwinds:
  Target’s guidance cut highlights ongoing retail sector challenges that could impact Walmart’s growth [6][7].

• Walmart’s holiday sales performance
• CEO transitions at both retailers (Walmart: John Furner taking over Feb 1, 2026 [3]; Target: Michael Fiddelke)
• Target’s turnaround progress [10]

[0] Ginlix Analytical Database (get_stock_realtime_quote, get_stock_daily_prices)
[1] Chronicle Journal - Walmart Defies Economic Headwinds with Stellar Q3 (http://markets.chroniclejournal.com/chroniclejournal/article/marketminute-2025-11-20-walmart-defies-economic-headwinds-with-stellar-q3-lifts-outlook-amidst-tech-driven-transformation)
[2] CNBC - Walmart (WMT) Q3 2026 Earnings (https://www.cnbc.com/2025/11/20/walmart-wmt-q3-2026-earnings.html)
[3] Yahoo Finance - Walmart Stock Rises After Q3 Earnings (https://finance.yahoo.com/news/walmart-stock-rises-after-q3-earnings-sales-top-expectations-as-company-raises-full-year-forecasts-120530398.html)
[4] Walmart FY26 Q3 Earnings Release (https://stock.walmart.com/_assets/_6262411037be77864e843592286d0a3b/walmart/db/938/9966/earnings_release/Earnings+Release+(FY26+Q3).pdf)
[5] CNBC Video - Walmart Hikes Forecasts (https://www.cnbc.com/video/2025/11/20/walmart-hikes-sales-and-earnings-forecast-as-it-attracts-shoppers-across-incomes.html)
[6] Yahoo Finance - Target Cuts Earnings Guidance (https://finance.yahoo.com/news/target-cuts-earnings-guidance-warns-about-high-prices-and-predicts-a-weak-holiday-season-113001475.html)
[7] LiveMint - Target Cuts 2025 Profit Forecast (https://www.livemint.com/companies/company-results/target-cuts-2025-profit-forecast-shares-fall-2-11763557307344.html)
[8] Target Q3 2025 Press Release (https://corporate.target.com/press/release/2025/11/target-corporation-reports-third-quarter-earnings)
[9] USA Today - Target Layoffs 2025 (https://www.usatoday.com/story/money/2025/11/21/job-layoffs-news-2025/87381731007/)
[10] CNBC - Target Q3 2025 Earnings (https://www.cnbc.com/2025/11/19/target-tgt-q3-2025-earnings.html)

This analysis is for informational purposes only and does not constitute investment advice. Always conduct independent research before making financial decisions.