U.S. Markets closed

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

Zacks Equity Research

Walmart (WMT) closed the most recent trading day at $119.74, moving +0.5% from the previous trading session. This move lagged the S&P 500's daily gain of 0.69%. Meanwhile, the Dow gained 0.22%, and the Nasdaq, a tech-heavy index, added 0.91%.

Heading into today, shares of the world's largest retailer had gained 1.73% over the past month, outpacing the Retail-Wholesale sector's loss of 1.18% and the S&P 500's loss of 0.61% in that time.

Investors will be hoping for strength from WMT as it approaches its next earnings release, which is expected to be November 14, 2019. 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.92 per share and revenue of $526.97 billion, which would represent changes of +0.2% and +2.44%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for WMT. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% higher. WMT currently has a Zacks Rank of #2 (Buy).

In terms of valuation, WMT is currently trading at a Forward P/E ratio of 24.23. This valuation marks a premium compared to its industry's average Forward P/E of 14.26.

It is also worth noting that WMT currently has a PEG ratio of 5.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Supermarkets stocks are, on average, holding a PEG ratio of 1.89 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 223, which puts it in the bottom 13% 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.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research