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Walmart (WMT) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Walmart (WMT) closed at $112.27, marking a -0.66% move from the previous day. This change lagged the S&P 500's daily loss of 0.16%. At the same time, the Dow added 0.11%, and the tech-heavy Nasdaq lost 0.44%.

Heading into today, shares of the world's largest retailer had gained 2.65% over the past month, lagging the Retail-Wholesale sector's gain of 4.42% and the S&P 500's gain of 4% in that time.

WMT will be looking to display strength as it nears its next earnings release, which is expected to be August 15, 2019. In that report, analysts expect WMT to post earnings of $1.21 per share. This would mark a year-over-year decline of 6.2%. Our most recent consensus estimate is calling for quarterly revenue of $130.49 billion, up 1.92% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.84 per share and revenue of $526.69 billion. These totals would mark changes of -1.43% and +2.39%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for WMT. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. WMT is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, WMT is holding a Forward P/E ratio of 23.36. This represents a premium compared to its industry's average Forward P/E of 14.

Meanwhile, WMT's PEG ratio is currently 4.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Supermarkets industry currently had an average PEG ratio of 1.66 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 85, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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