Why Shares of Walmart are Sinking Today

By Bram Berkowitz – Mar 5, 2026 at 1:19PM ESTKey PointsErste Group analyst Hans Engel downgraded Walmart from a Buy rating to Hold on valuation concerns.Walmart stock recently traded at close to 47 times earnings.Shares of Walmart (WMT 4.12%) traded roughly 4.3% lower, as of 1:18 p.m. ET. The stock received negative sentiment from Wall Street earlier today. Valuation concerns Walmart has been a superb stock to own. It's up about 28% over the past year and 185% in the past five years. Image source: Getty Images. The company has moved beyond its traditional brick-and-mortar retail business and built out other successful revenue streams, including e-commerce, using its stores as fulfillment centers, a membership model, and even an advertising business.

But Wall Street analyst Hans Engel from the Austrian bank Erste Group thinks the valuation is now too high. At the time of the note, Engel noted that Walmart's price-to-earnings (P/E) ratio was close to 47. ExpandNASDAQ: WMTWalmartToday's Change(-4.12%) $-5.27Current Price$122.54Key Data PointsMarket Cap$1.0TDay's Range$121.66 - $125.6552wk Range$79.81 - $134.69Volume1.3MAvg Vol31MGross Margin25.40%Dividend Yield0.74% "The expected P/E ratio is currently much higher than the average of peer companies," Engel wrote, lowering his rating on Walmart from a buy rating to hold. Even strong companies have their limits Engel's note certainly raises a valid point. How many stocks that are considered defensive plays receive a valuation approaching 50 times earnings? Walmart has certainly executed well, building out several powerful revenue streams. Stocks often trade at premiums when investors believe they have a perceived and lasting competitive advantage, or moat, in their industry. Walmart has not only demonstrated consistent growth but is also a Dividend King, meaning it has paid and raised its annual dividend for over 50 years, which also appeals to investors who focus solely on passive income. Ultimately, I think investors can continue to buy and hold Walmart as a long-term defensive play. However, the valuation is definitely high, which may limit its near- to medium-term upside.Read NextMar 4, 2026 •By Daniel SparksWalmart vs. Target: Which Stock Is a Better Buy?Mar 4, 2026 •By Prosper Junior Bakiny2 High-Flying Stocks With More Upside to Buy and HoldMar 3, 2026 •By Neil Patel3 Things to Know About Walmart Stock Before You BuyMar 2, 2026 •By David Jagielski, CPAHas Walmart's Stock Peaked?Mar 1, 2026 •By Lawrence NgaDoes Walmart Have a Durable Competitive Advantage?Feb 26, 2026 •By Jennifer SaibilWalmart Isn't the Biggest Company in the U.S. Anymore, but Here's the Surprising Catalyst That's Driving GrowthAbout the AuthorBram Berkowitz is a contributing Motley Fool stock market analyst covering financials, technology, consumer goods, and macroeconomic trends.

Before The Motley Fool, Bram worked in equity research covering bank stocks and as a reporter for local publications. He holds FINRA Series 7 and 66 licenses, as well as a bachelor’s degree in business with a minor in economics from Syracuse University.TMFBramX@BramBerkoStocks MentionedWalmartNASDAQ: WMT$122.45(-4.19%)-$5.36*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.