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Walmart Likely to Beat Q2 Earnings Estimates: ETFs in Focus
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The world's largest brick-and-mortar retailer — Walmart (WMT - Free Report) — is scheduled to report its second-quarter 2024 results on Aug 17 before market open. Let’s take a closer look at its fundamentals ahead of the earnings release.
Walmart has been hitting record highs ahead of its earnings release. The stock has gained 6.4% over the past three months, outperforming the Zacks industry average growth of 0.7%. The outperformance is likely to continue, given that Walmart has a strong chance of beating estimates this quarter (read: Retail ETFs in Focus Ahead of Big-Box Q2 Earnings).
This has put the ETFs having a substantial allocation to this luxury carmaker like VanEck Vectors Retail ETF (RTH - Free Report) , Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) , Vanguard Consumer Staples ETF (VDC - Free Report) and iShares U.S. Consumer Focused ETF (IEDI - Free Report) in focus ahead of second-quarter earnings.
Earnings Whispers
Walmart has an Earnings ESP of +2.10% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The retailer saw a positive earnings estimate revision of a couple of cents over the past seven days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The Zacks Consensus Estimate for the second quarter indicates a substantial year-over-year earnings decline of 4.5% but revenue growth of 4.5%.
Further, the earnings track record of the company is robust. It delivered a four-quarter average earnings surprise of 12.03%.
Walmart has a top VGM Score of B and belongs to a top-ranked Zacks industry (in the top 17%). The Zacks Consensus Estimate for the average target price is $172.53, with nearly 83% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What to Watch?
The mega-retailer lifted its fiscal 2024 guidance in the fiscal first-quarter release. It expects revenues to rise 3.5% compared with the previous projection of 2.5-3% and expects earnings per share in the range of $6.10-$6.20, up from $5.90-$6.05.
Walmart is set to raise its full-year earnings forecast again when it reports quarterly results. The retailer is benefiting from the resilience of its massive grocery business, which is enabling the company to grab more sales even as borrowing costs rise, lending standards tighten and the employment picture weakens.
VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Walmart takes the third spot with 8.3% share.
VanEck Vectors Retail ETF has amassed $156.8 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 5,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report)
Fidelity MSCI Consumer Staples Index ETF tracks the MSCI USA IMI Consumer Staples Index, holding 108 stocks in its basket. Of these, Walmart takes the fifth spot with a 7.8% share in FSTA (see: all Consumer Staples ETFs here).
Fidelity MSCI Consumer Staples Index ETF has amassed $1.2 billion in its asset base while trading in a good volume of around 157,000 shares a day, on average. FSTA charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Vanguard Consumer Staples ETF also targets the broad consumer staples space by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 105 stocks in its basket, with Walmart occupying the fifth position, having a 7.8% allocation. Vanguard Consumer Staples ETF is widely spread across soft drinks, consumer staples merchandise retail, household products, and packaged foods & meats that make up for a double-digit allocation each.
Vanguard Consumer Staples ETF manages a $7 billion asset base and charges a fee of 10 bps per year. VDC trades in a good volume of around 149,000 shares per day, on average, and has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares U.S. Consumer Focused ETF is an actively managed ETF providing exposure to U.S. companies with a focus on U.S. consumer spending and consumer goods. It holds 184 stocks in its basket, with Walmart occupying the fourth position at 5.7% share. IEDI is dominated by the consumer discretionary sector with nearly half of the portfolio, while consumer staples distribution & retail, and consumer services round off the next two with double-digit exposure each (read: 5 ETFs to Ride On Solid Q2 Economic Growth).
iShares U.S. Consumer Focused ETF has accumulated $14.4 million in its asset base and charges 18 bps in fees per year. Volume is paltry for IEDI as it exchanges 2,000 shares a day, on average.
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Walmart Likely to Beat Q2 Earnings Estimates: ETFs in Focus
The world's largest brick-and-mortar retailer — Walmart (WMT - Free Report) — is scheduled to report its second-quarter 2024 results on Aug 17 before market open. Let’s take a closer look at its fundamentals ahead of the earnings release.
Walmart has been hitting record highs ahead of its earnings release. The stock has gained 6.4% over the past three months, outperforming the Zacks industry average growth of 0.7%. The outperformance is likely to continue, given that Walmart has a strong chance of beating estimates this quarter (read: Retail ETFs in Focus Ahead of Big-Box Q2 Earnings).
This has put the ETFs having a substantial allocation to this luxury carmaker like VanEck Vectors Retail ETF (RTH - Free Report) , Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) , Vanguard Consumer Staples ETF (VDC - Free Report) and iShares U.S. Consumer Focused ETF (IEDI - Free Report) in focus ahead of second-quarter earnings.
Earnings Whispers
Walmart has an Earnings ESP of +2.10% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The retailer saw a positive earnings estimate revision of a couple of cents over the past seven days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The Zacks Consensus Estimate for the second quarter indicates a substantial year-over-year earnings decline of 4.5% but revenue growth of 4.5%.
Further, the earnings track record of the company is robust. It delivered a four-quarter average earnings surprise of 12.03%.
Walmart has a top VGM Score of B and belongs to a top-ranked Zacks industry (in the top 17%). The Zacks Consensus Estimate for the average target price is $172.53, with nearly 83% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What to Watch?
The mega-retailer lifted its fiscal 2024 guidance in the fiscal first-quarter release. It expects revenues to rise 3.5% compared with the previous projection of 2.5-3% and expects earnings per share in the range of $6.10-$6.20, up from $5.90-$6.05.
Walmart is set to raise its full-year earnings forecast again when it reports quarterly results. The retailer is benefiting from the resilience of its massive grocery business, which is enabling the company to grab more sales even as borrowing costs rise, lending standards tighten and the employment picture weakens.
ETFs to Watch
VanEck Vectors Retail ETF (RTH - Free Report)
VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Walmart takes the third spot with 8.3% share.
VanEck Vectors Retail ETF has amassed $156.8 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 5,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report)
Fidelity MSCI Consumer Staples Index ETF tracks the MSCI USA IMI Consumer Staples Index, holding 108 stocks in its basket. Of these, Walmart takes the fifth spot with a 7.8% share in FSTA (see: all Consumer Staples ETFs here).
Fidelity MSCI Consumer Staples Index ETF has amassed $1.2 billion in its asset base while trading in a good volume of around 157,000 shares a day, on average. FSTA charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Vanguard Consumer Staples ETF (VDC - Free Report)
Vanguard Consumer Staples ETF also targets the broad consumer staples space by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 105 stocks in its basket, with Walmart occupying the fifth position, having a 7.8% allocation. Vanguard Consumer Staples ETF is widely spread across soft drinks, consumer staples merchandise retail, household products, and packaged foods & meats that make up for a double-digit allocation each.
Vanguard Consumer Staples ETF manages a $7 billion asset base and charges a fee of 10 bps per year. VDC trades in a good volume of around 149,000 shares per day, on average, and has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares U.S. Consumer Focused ETF (IEDI - Free Report)
iShares U.S. Consumer Focused ETF is an actively managed ETF providing exposure to U.S. companies with a focus on U.S. consumer spending and consumer goods. It holds 184 stocks in its basket, with Walmart occupying the fourth position at 5.7% share. IEDI is dominated by the consumer discretionary sector with nearly half of the portfolio, while consumer staples distribution & retail, and consumer services round off the next two with double-digit exposure each (read: 5 ETFs to Ride On Solid Q2 Economic Growth).
iShares U.S. Consumer Focused ETF has accumulated $14.4 million in its asset base and charges 18 bps in fees per year. Volume is paltry for IEDI as it exchanges 2,000 shares a day, on average.