Walmart Inc WMT could serve as a bellwether for the health of U.S. consumers when the company reports third-quarter financial results on Tuesday, Nov. 19 before the market opens.
Earnings Estimates: Analysts expect Walmart to report third-quarter revenue of $167.72 billion, up from $160.8 billion in last year's third quarter, according to data from Benzinga Pro.
Walmart has beaten analyst estimates for revenue in more than 10 straight quarters.
Analysts expect the company to report third-quarter earnings per share of 53 cents, up from 51 cents per share in last year's third quarter. Walmart has beaten analyst estimates for earnings per share in three straight quarters.
Over the last 10 quarters, Walmart has beaten analyst earnings per share estimates eight times, met estimates one time and missed only one time.
Guidance from the company calls for third-quarter revenue to be in the range of $164.58 billion to $166.17 billion and earnings per share to be in a range of 51 cents to 52 cents per share.
What Analysts Are Saying: Discretionary and consumable trends could be steady for retailers in the third quarter, BMO Capital analyst Kelly Bania said in a new investor note.
The analyst maintained an Outperform rating on Walmart. Bania also raised the price target from $80 to $100 ahead of the earnings report.
Walmart is showing strong U.S. comparable sales and posting an earnings per share beat, Bania said.
"We continue to believe WMT's decade of omni-channel investments are the early stages of paying off and believe WMT should remain a core holding," she added.
Walmart could show strong market share gains in the grocery category along with improvement in discretionary and general merchandise, Bania said, adding that “share gains are coming across all income cohorts."
Bania estimates that Walmart's U.S. grocery sales are up 38% since 2019.
"We believe WMT's share price remains attractive for a global retailer with difficult-to-replicate scale."
The analyst said Walmart's valuation can move higher with a consistency of earnings growth in coming years.
Freedom Capital Markets Chief Global Strategist Jay Woods highlighted Walmart stock having one of its best performances in more than 25 years with shares up 60% year-to-date and trading near all-time highs ahead of the earnings report.
"Shares have climbed higher after earnings after eight of the last 10 reports and has an average move of +/- 3.8%," Woods said in a weekly newsletter.
Woods said it "will be interesting" to see if analysts raise their price targets after the third quarter earnings report.
Key Items to Watch: Walmart reported global e-commerce sales were up 21% year-over-year in the second quarter, helped by store-fulfilled pickup and delivery. The third quarter results could show if investments in e-commerce and order fulfillment continue to pay off.
Advertising is another area to watch with global advertising up 26% year-over-year in the second quarter.
"Our newer businesses like marketplace, advertising, and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model," Walmart CEO Doug McMillon said after second quarter results.
Walmart's third-quarter results come one day before Target Corporation reports quarterly results. Several large retail and e-commerce stocks could be under pressure after Walmart's report.
Price Action: Walmart stock is down 0.2% to $84.06 on Monday versus a 52-week trading range of $49.85 to $85.79. Walmart stock is up 58.3% year-to-date in 2024.
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