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

Zacks Equity Research
·3 min read

Walmart (WMT) closed at $144.18 in the latest trading session, marking a -0.08% move from the prior day. This change lagged the S&P 500's daily gain of 0.13%. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.15%.

Heading into today, shares of the world's largest retailer had lost 5.46% over the past month, lagging the Retail-Wholesale sector's loss of 0.15% and the S&P 500's gain of 2.59% in that time.

Investors will be hoping for strength from WMT as it approaches its next earnings release. The company is expected to report EPS of $1.47, up 6.52% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 0.18% higher within the past month. WMT is currently a Zacks Rank #3 (Hold).

Looking at its valuation, WMT is holding a Forward P/E ratio of 26.02. For comparison, its industry has an average Forward P/E of 20.28, which means WMT is trading at a premium to the group.

It is also worth noting that WMT currently has a PEG ratio of 4.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Supermarkets was holding an average PEG ratio of 3.09 at yesterday's closing price.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 129, which puts it in the top 50% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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