Jim Cramer Calls Walmart Stock's Decline "Excessive"

Walmart Inc. (NASDAQ: WMT ) was among the stocks Jim Cramer commented on as he advised investors on how to take advantage of Wednesday's market rotation . Cramer highlighted the stock's recent decline. He remarked:

Alright, here's one: how about Walmart? Did you see that? At one point, it was down 5%. Closed down 3.9% today. Do you know that's in the red for the year? The thesis here is that oil's come down and gasoline will follow, so consumers will no longer need to shop at Walmart to save money. I think that's nonsense. I know sometimes it's hard to pay 37 times Walmart's earnings, but this one's now fallen 26 points from its high. That feels excessive to me. How about you? Hey, by the way, the decline in TJX is really excessive.

Walmart Inc. (NASDAQ:WMT) operates retail stores, warehouse clubs, and online platforms that sell groceries, everyday essentials, home goods, apparel, electronics, and more. Cramer discussed the company during the May 27 episode, as he commented:

Now, let's talk about the retailers that were, I don't know, let's call them more or less okay, Walmart and Target. I hesitate to call these quarters bad, but they clearly, you know, the market didn't like them. Wall Street took a look at Walmart's numbers and decided to sell the stock hard. It tumbled 7.2% in response last Thursday… I don't think it's so bad, but I think, let's put it this way, I think the declines were excessive. Walmart matched expectations for U.S. same-store sales, up 4.1%. Eked out a small revenue beat. Delivered inline earnings, which were up 8% year over year.

Walmart also declined to raise its full-year forecast, which sat below Wall Street's estimates. Management argued that even reiterating their previous forecast should be seen as a positive, given the impact of higher fuel prices. But they also talked about the new pressure on the consumer. We don't want to hear that. And that's how we ended up with a negative reaction to the quarter. Doesn't help that Walmart's pretty expensive relative to its growth rate. In the long run, though, look, I think Walmart's fine. I see the pullback [as a] rare buying opportunity.

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