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

Zacks Equity Research

Walmart (WMT) closed at $115.27 in the latest trading session, marking a +0.88% move from the prior day. The stock lagged the S&P 500's daily gain of 1.5%. At the same time, the Dow added 1.44%, and the tech-heavy Nasdaq gained 2.1%.

Prior to today's trading, shares of the world's largest retailer had lost 2.87% over the past month. This has lagged the Retail-Wholesale sector's gain of 0.37% and the S&P 500's gain of 0.54% in that time.

Wall Street will be looking for positivity from WMT as it approaches its next earnings report date. This is expected to be February 18, 2020. On that day, WMT is projected to report earnings of $1.44 per share, which would represent year-over-year growth of 2.13%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $142.66 billion, up 2.78% from the year-ago period.

Investors should also note any recent changes to analyst estimates for WMT. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant. WMT is currently a Zacks Rank #2 (Buy).

Looking at its valuation, WMT is holding a Forward P/E ratio of 21.97. This represents a premium compared to its industry's average Forward P/E of 13.23.

We can also see that WMT currently has a PEG ratio of 4.43. 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. The Retail - Supermarkets industry currently had an average PEG ratio of 2.5 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 52, putting it in the top 21% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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