In a week led by quarterly results from large retailers, Home Depot HD and Walmart WMT will be two companies to watch.
Let’s see if now is a good time to buy stock in these retail giants with Home Depot and Walmart set to report their Q2 results on August 15 and 17 respectively.
HD Q2 Preview: With HD shares trading 5% from their 52-week highs, Home Depot is expecting a small dip in its top and bottom lines for Q2 following a tough-to-compete-against quarter.
Earnings are expected at $4.46 per share which would be an -11% decrease from EPS of $5.05 a year ago. However, it’s noteworthy that Home Depot has surpassed earnings expectations for 12 consecutive quarters, dating back to August of 2020. On the top line, second-quarter sales are forecasted to be down -3% to $42.25 billion.
WMT Q2 Preview: Walmart recently hit a new 52-week high today with mixed results expected in its Q2 report on Thursday.
Wall Street will be seeing if consumers are still leaning towards Walmart for savings over other omni-channel retailers like Target TGT even as inflation begins to ease. Notably, the preference for Walmart among the consumer masses has been reflected in their stocks. Target stock is still 30% from its 52-week highs and has kept falling in contrast to shares of WMT.
Walmart's Q2 earnings are expected to be down -5% at $1.68 per share compared to EPS of $1.77 in the prior-year quarter. This is despite Q2 sales projected to be up 4% to $159.71 billion. Plus, Walmart has topped earnings expectations in its last four quarterly reports. The Zacks Expected Surprise Prediction (ESP) also indicates Walmart may be able to top earnings estimates again with the Most Accurate Estimate having Q2 EPS at $1.70 and 1% above the Zacks Consensus.
Growth & Outlook
Home Depot’s annual earnings are now expected to be down -10% in its current fiscal 2024 at $14.97 per share compared to $16.99 a share in FY23. Fiscal 2025 earnings are expected to stabilize and rebound 7%. Furthermore, FY25 EPS projections of $16.01 per share would still represent 23% growth over the last five years with earnings at $12.03 a share in fiscal 2021.
While not overwhelming, this is respectable growth for a mature company of Home Depot’s size. Total sales are forecasted to dip -3% in FY24 but stabilize and rise 2% in FY25 to $155.07 billion. Fiscal 2025 sales would be a 17% increase over the last five years with FY21 sales at $132.11 billion.
Turning to Walmart, annual earnings are expected to be virtually flat in its current FY24 and then rise 11% in FY25 to $6.92 per share. Fiscal 2025 EPS projections would represent 26% growth over the last five years with FY21 earnings at $5.48 a share.
Even better, Walmart’s total sales are anticipated to be up 4% in FY24 and rise another 3% in FY25 to $660.63 billion. Fiscal 2025 projections would be an 18% increase over the last five years with FY21 sales at $559.15 billion.
Takeaway
Going into their second-quarter reports, Walmart stock sports a Zacks Rank #2 (Buy) with Home Depot landing a Zacks Rank #3 (Hold). Overall, the growth of these retail giants is still attractive and Walmart stands out ahead of its Q2 results with the Zacks ESP indicating the company should beat earnings expectations.
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In a week led by quarterly results from large retailers, Home Depot HD and Walmart WMT will be two companies to watch.
Let’s see if now is a good time to buy stock in these retail giants with Home Depot and Walmart set to report their Q2 results on August 15 and 17 respectively.
HD Q2 Preview: With HD shares trading 5% from their 52-week highs, Home Depot is expecting a small dip in its top and bottom lines for Q2 following a tough-to-compete-against quarter.
Earnings are expected at $4.46 per share which would be an -11% decrease from EPS of $5.05 a year ago. However, it’s noteworthy that Home Depot has surpassed earnings expectations for 12 consecutive quarters, dating back to August of 2020. On the top line, second-quarter sales are forecasted to be down -3% to $42.25 billion.
WMT Q2 Preview: Walmart recently hit a new 52-week high today with mixed results expected in its Q2 report on Thursday.
Wall Street will be seeing if consumers are still leaning towards Walmart for savings over other omni-channel retailers like Target TGT even as inflation begins to ease. Notably, the preference for Walmart among the consumer masses has been reflected in their stocks. Target stock is still 30% from its 52-week highs and has kept falling in contrast to shares of WMT.
Walmart's Q2 earnings are expected to be down -5% at $1.68 per share compared to EPS of $1.77 in the prior-year quarter. This is despite Q2 sales projected to be up 4% to $159.71 billion. Plus, Walmart has topped earnings expectations in its last four quarterly reports. The Zacks Expected Surprise Prediction (ESP) also indicates Walmart may be able to top earnings estimates again with the Most Accurate Estimate having Q2 EPS at $1.70 and 1% above the Zacks Consensus.
Growth & Outlook
Home Depot’s annual earnings are now expected to be down -10% in its current fiscal 2024 at $14.97 per share compared to $16.99 a share in FY23. Fiscal 2025 earnings are expected to stabilize and rebound 7%. Furthermore, FY25 EPS projections of $16.01 per share would still represent 23% growth over the last five years with earnings at $12.03 a share in fiscal 2021.
While not overwhelming, this is respectable growth for a mature company of Home Depot’s size. Total sales are forecasted to dip -3% in FY24 but stabilize and rise 2% in FY25 to $155.07 billion. Fiscal 2025 sales would be a 17% increase over the last five years with FY21 sales at $132.11 billion.
Turning to Walmart, annual earnings are expected to be virtually flat in its current FY24 and then rise 11% in FY25 to $6.92 per share. Fiscal 2025 EPS projections would represent 26% growth over the last five years with FY21 earnings at $5.48 a share.
Even better, Walmart’s total sales are anticipated to be up 4% in FY24 and rise another 3% in FY25 to $660.63 billion. Fiscal 2025 projections would be an 18% increase over the last five years with FY21 sales at $559.15 billion.
Takeaway
Going into their second-quarter reports, Walmart stock sports a Zacks Rank #2 (Buy) with Home Depot landing a Zacks Rank #3 (Hold). Overall, the growth of these retail giants is still attractive and Walmart stands out ahead of its Q2 results with the Zacks ESP indicating the company should beat earnings expectations.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
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