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Walmart (WMT) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 mins read

Walmart (WMT) closed the most recent trading day at $141.36, moving +0.33% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.8%. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 0.5%.

Investors will be hoping for strength from WMT as it approaches its next earnings release. On that day, WMT is projected to report earnings of $1.18 per share, which would represent year-over-year growth of 1.72%. Our most recent consensus estimate is calling for quarterly revenue of $131.74 billion, up 2.93% from the year-ago period.

WMT's full-year Zacks Consensus Estimates are calling for earnings of $5.35 per share and revenue of $551.08 billion. These results would represent year-over-year changes of +8.52% and +5.18%, respectively.

It is also important to note the recent changes to analyst estimates for WMT. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 has moved 1.28% higher. WMT is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that WMT has a Forward P/E ratio of 26.34 right now. This valuation marks a premium compared to its industry's average Forward P/E of 17.01.

We can also see that WMT currently has a PEG ratio of 4.68. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Supermarkets stocks are, on average, holding a PEG ratio of 2.48 based on yesterday's closing prices.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 30, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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Zacks Investment Research