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

Zacks Equity Research

In the latest trading session, Walmart (WMT) closed at $112.82, marking a -0.95% move from the previous day. This move lagged the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.07%, while the tech-heavy Nasdaq added 0.71%.

Heading into today, shares of the world's largest retailer had gained 3.25% over the past month, outpacing the Retail-Wholesale sector's gain of 2.94% and the S&P 500's gain of 1.93% in that time.

WMT will be looking to display strength as it nears its next earnings release, which is expected to be August 15, 2019. The company is expected to report EPS of $1.21, down 6.2% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $130.49 billion, up 1.92% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.83 per share and revenue of $526.69 billion, which would represent changes of -1.63% and +2.39%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for WMT. Recent revisions tend to reflect the latest near-term business trends. 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. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. 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 23.56. This represents a premium compared to its industry's average Forward P/E of 14.4.

We can also see that WMT currently has a PEG ratio of 4.98. 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. WMT's industry had an average PEG ratio of 1.53 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 85, putting it in the top 34% 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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