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

Zacks Equity Research

In the latest trading session, Walmart (WMT) closed at $116.31, marking a +0.16% move from the previous day. This move lagged the S&P 500's daily gain of 0.8%. At the same time, the Dow added 0.47%, and the tech-heavy Nasdaq gained 1.12%.

Coming into today, shares of the world's largest retailer had gained 0.18% in the past month. In that same time, the Retail-Wholesale sector lost 2.54%, while the S&P 500 lost 1.07%.

Investors will be hoping for strength from WMT as it approaches its next earnings release. The company is expected to report EPS of $1.09, up 0.93% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $128.99 billion, up 3.28% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.91 per share and revenue of $526.64 billion. These totals would mark changes of 0% and +2.38%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for WMT. Recent revisions tend to reflect the latest near-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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% higher. WMT is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note WMT's current valuation metrics, including its Forward P/E ratio of 23.63. Its industry sports an average Forward P/E of 13.61, so we one might conclude that WMT is trading at a premium comparatively.

We can also see that WMT currently has a PEG ratio of 5. 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 was holding an average PEG ratio of 1.86 at yesterday's closing price.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 109, putting it in the top 43% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WMT in the coming trading sessions, be sure to utilize Zacks.com.

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