What Does Walmart’s Stock Split Mean for Investors? (2024)

Shares of the retailer will carry a fair value estimate of $49 after its 3-for-1 split.

Retail giant Walmart WMT is preparing for its first stock split in more than two decades. The company’s 3-for-1 split means investors will receive an additional two shares for each one they already own. The move will increase the firm’s outstanding shares from 2.7 billion to about 8.1 billion. Walmart last did this in April 1999, when it split shares on a 2-for-1 basis.

The Date for Walmart’s Stock Split

The split is set to take place after the market’s close on Feb. 23. Shares will trade on a post-split basis beginning Feb. 26.

What Walmart’s Stock Split Means

The split won’t affect Morningstar equity analyst Noah Rohr’s view of Walmart’s stock, which he values at $147 per share. After the split, the company’s fair value estimate will be adjusted to $49 per share to account for the threefold increase in its outstanding shares. Walmart’s wide economic moat rating will be unaffected. The stock will still be rated 2 stars (meaning it’s considered overvalued), trading at a premium of 18% as of Feb. 22.

Rohr thinks the company’s strong fourth-quarter results indicate its low prices are continuing to win over consumers, but he warns that the retailer’s guidance for 2025 came in slightly below expectations. “We do not expect pronounced margin expansion in the near term, as we forecast continued softness in the higher-margin general merchandise category and further investments in store remodels after 700 remodels were completed in fiscal 2024,” he says.

Rohr also points to Walmart’s continued investment in its e-commerce capabilities, and he adds that its planned acquisition of Vizio Holding VZIO could bolster its advertising business. “We are encouraged by Walmart’s efforts to distance itself from smaller brick-and-mortar retailers by adapting to consumers’ evolving purchasing preferences, and we expect margins to gradually improve as its digital fulfillment capabilities scale. Management noted that its e-commerce contribution margin is positive, but did not provide a time frame for eventual profitability,” he explains. “That said, we do not expect Walmart’s omnichannel and digital ambitions to culminate in a digital ecosystem similar to its peer, Amazon.com AMZN.”

Other Recent Stock Splits

Walmart’s stock split comes after several other major tech and consumer companies did the same in recent years. Google parent company Alphabet GOOGL/GOOG, electric carmaker Tesla TSLA, and Walmart competitor Amazon all split their shares in 2022.