The Bull Case For Walmart (WMT) Could Change Following FDA Formula Warning And ESOP Shift - Learn Why

• In recent weeks, Walmart has expanded and refreshed key product lines through partners like No Cap! Soda Pop, AXIL Brands, and Dove x Crumbl, while also facing an FDA warning letter over recalled ByHeart infant formula remaining on its shelves after a nationwide recall.
• At the same time, Walmart has closed older employee stock ownership plan shelf registrations, filed a new multi-billion-dollar ESOP-related registration, and joined the Nasdaq Composite Index, underscoring how employee ownership and capital-market positioning intersect with its evolving omnichannel retail strategy.
• Next, we’ll examine how Walmart’s FDA warning letter over recalled infant formula affects its AI-driven, omni-channel investment narrative.

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Walmart Investment Narrative Recap

To own Walmart today, you need to believe its AI-enabled, omni-channel model can keep driving steady growth while higher margin services like advertising and memberships gradually matter more than basic retail. The biggest near term catalyst remains execution in e-commerce and logistics, and the recent FDA warning over recalled ByHeart infant formula on shelves is a reputational and compliance setback, but it does not appear to alter that core investment case unless it signals broader systems weaknesses.

Among the recent announcements, Walmart’s closure of older ESOP shelf registrations and filing of a new US$16.53 billion ESOP-related shelf stands out, because it ties employee ownership to the same long term, tech-led, omni-channel strategy that underpins investor expectations. While this could modestly influence future share count and compensation structures, the more immediate focus for many shareholders will likely remain on how effectively Walmart converts its scale and AI investments into better digital economics.

Yet behind the strong omni-channel narrative, the FDA’s findings raise a different kind of risk that investors should understand before they...

Read the full narrative on Walmart (it's free!)

Walmart's narrative projects $789.9 billion revenue and $27.4 billion earnings by 2028. This requires 4.5% yearly revenue growth and about a $6.1 billion earnings increase from $21.3 billion today.

Uncover how Walmart's forecasts yield a $119.45 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Nineteen members of the Simply Wall St Community place Walmart’s fair value between US$94 and about US$119, reflecting wide variation in expectations. Some of those views sit against concerns that rising delivery and logistics costs in e-commerce could limit how much Walmart ultimately benefits from its AI powered, omni-channel strategy over time, so it is worth weighing several of these perspectives together.

Explore 19 other fair value estimates on Walmart - why the stock might be worth as much as 6% more than the current price!

Build Your Own Walmart Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Walmart research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Walmart research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Walmart's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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