Walmart Earnings: Low Prices and Strong Digital Presence Drive Market Share Gains

Wide-moat Walmart delivered strong fiscal 2025 first-quarter results as its low prices and digital investments continued to attract a vast array of consumers. Total revenue expanded 6%, with growth dispersed across the domestic and international businesses. Top-line growth and resilient margins prompted a 20% increase in adjusted earnings per share to $0.60, easily surpassing our $0.52 forecast. We plan to raise our $50 fair value estimate by a mid-single-digit percentage (in line with the stock price reaction after the May 16 release) as we think the retailer is well positioned to continue taking market share across various income cohorts. Still, we view the shares as overvalued.