Is Walmart's Health Business Signaling Pharmacy Strength?

Walmart Inc. WMT continues to see steady traction in its health and wellness business, with pharmacy emerging as a meaningful underlying driver of growth. The category’s performance reflects a combination of rising prescription volumes, share gains and a richer mix of branded drugs, indicating sustained customer engagement in pharmacy services.

Health and wellness sales in the United States saw high single-digit comparable growth in the fourth quarter of fiscal 2026, largely supported by stronger pharmacy script counts. This suggests that demand fundamentals remain intact, with customers increasingly relying on Walmart for prescription fulfillment. The gains also point to improving competitive positioning in pharmacy, particularly as higher-value branded drugs contribute to the sales mix.

However, changes related to drug pricing regulations, specifically the implementation of Maximum Fair Pricing, created a noticeable drag on the category. Despite this headwind, the business continued to deliver solid growth, highlighting the resilience of volume-driven expansion.

The broader takeaway is that pharmacy strength is currently being driven more by utilization and market share gains than by pricing. Even as reimbursement dynamics weigh on reported growth, the steady increase in script volumes signals that Walmart’s pharmacy offering is gaining relevance with customers.

Overall, the trajectory of Walmart’s health business suggests that pharmacy is not just contributing to growth but is becoming a structurally important component. The ability to sustain script growth amid pricing pressures reinforces its role as a consistent and dependable growth lever within the company’s evolving health ecosystem.

What Do the Latest Metrics Say About Walmart?

Walmart, which competes with Costco Wholesale Corporation COST and Target Corporation TGT, has seen its shares rally 32.5% over the past year compared with the industry’s 30.3% growth. Shares of Costco have dipped 0.3%, while Target has gained 37.1% in the aforementioned period.

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From a valuation standpoint, Walmart's forward 12-month price-to-earnings ratio stands at 44.15, higher than the industry’s 40.49. The company is trading at a premium to Target (with a forward 12-month P/E ratio of 15.84) while trading at a discount to Costco (46.65). 

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The Zacks Consensus Estimate for Walmart’s current fiscal-year sales and earnings per share implies year-over-year growth of about 5% and 9.5%, respectively. 

Walmart currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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