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Walmart (WMT) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

Walmart (WMT) closed the most recent trading day at $148.97, moving +1.14% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.04%. Elsewhere, the Dow gained 0.19%, while the tech-heavy Nasdaq added 0.28%.

Heading into today, shares of the world's largest retailer had gained 1.13% over the past month, outpacing the Retail-Wholesale sector's loss of 0.75% and lagging the S&P 500's gain of 3.84% in that time.

Investors will be hoping for strength from WMT as it approaches its next earnings release. In that report, analysts expect WMT to post earnings of $1.47 per share. This would mark year-over-year growth of 6.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $146.06 billion, up 3.1% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.55 per share and revenue of $554.69 billion. These totals would mark changes of +12.58% and +5.86%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for WMT. These revisions typically reflect the latest short-term business trends, which can change frequently. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. WMT currently has a Zacks Rank of #2 (Buy).

Investors should also note WMT's current valuation metrics, including its Forward P/E ratio of 26.56. Its industry sports an average Forward P/E of 20.42, so we one might conclude that WMT is trading at a premium comparatively.

Investors should also note that WMT has a PEG ratio of 4.83 right now. 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 was holding an average PEG ratio of 2.83 at yesterday's closing price.

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 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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