Walmart Inc. (NYSE:WMT) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 2.1% to hit US$134b. Walmart also reported a statutory profit of US$1.40, which was an impressive 31% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Walmart after the latest results.
Following last week's earnings report, Walmart's 21 analysts are forecasting 2021 revenues to be US$537.0b, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 3.1% to US$5.12 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$538.4b and earnings per share (EPS) of US$5.05 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$130. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Walmart at US$145 per share, while the most bearish prices it at US$98.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Walmart's revenue growth is expected to slow, with forecast 0.4% increase next year well below the historical 2.0%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.9% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Walmart.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Walmart's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$130, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Walmart analysts - going out to 2025, and you can see them free on our platform here.
Even so, be aware that Walmart is showing 1 warning sign in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. 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. Thank you for reading.