HSBC downgrades Walmart to Hold from Buy

HSBC downgrades Walmart to Hold from Buy

HSBC Downgrades Walmart to Hold Amid Mixed Earnings Outlook

On February 19, 2026, HSBC downgraded Walmart Inc. (WMT) from "Buy" to "Hold", reflecting cautious sentiment ahead of the retail giant's earnings report and broader market dynamics. The move comes as investors weigh Walmart's recent performance against intensifying competition and evolving consumer trends.

Walmart's stock closed at $124.87 on February 19, down 1.38% from the previous day's close of $126.62. The stock has traded within a 52-week range of $79.81 to $134.69, with current valuations reflecting a price-to-earnings (P/E) ratio of 46.38 and a dividend yield of 0.74%. Earlier in the day, shares saw a post-earnings dip before partially recovering in after-hours trading.

The downgrade follows Walmart's recent earnings announcement, which included a conservative profit outlook despite strong e-commerce growth. Analysts noted that the company's guidance aligned with its historically cautious approach, though some, like Bernstein's Zhihan Ma, recommended buying shares on weakness. Meanwhile, Amazon surpassed Walmart in annual revenue for the first time, intensifying scrutiny of Walmart's market position.

HSBC's decision contrasts with broader analyst optimism, as 89% of 46 recent ratings for Walmart remain "Buy," while 6.5% are "Hold" and 4.3% are "Sell." Morgan Stanley's Simeon Gutman highlighted Walmart's solid fundamentals in post-earnings commentary, though mixed reactions to its profit projections persisted.

Looking ahead, Walmart faces key challenges, including AI-driven competition from Amazon and margin pressures. However, its omnichannel strategy and recent investments in AI-powered tools like Sparky—a chatbot boosting online sales—position it to adapt to shifting retail dynamics.

Investors will closely watch Walmart's upcoming earnings date on February 19, 2026, and its ability to balance cost management with innovation in a competitive landscape. For now, HSBC's downgrade underscores the delicate balance between caution and confidence in the retail sector.

(https://www.cnbc.com/quotes/WMT): CNBC, Robinhood
(https://robinhood.com/us/en/stocks/WMT/): Robinhood
(https://www.streetinsider.com/Analyst+Comments/HSBC+Downgrades+Walmart+%28WMT%29+to+Hold/26031984.html): StreetInsider