Back to top

Image: Bigstock

Walmart (WMT) Stock Sinks As Market Gains: Here's Why

Read MoreHide Full Article

The latest trading session saw Walmart (WMT - Free Report) ending at $60.17, denoting a -0.91% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 0.11%. At the same time, the Dow added 0.12%, and the tech-heavy Nasdaq lost 0.12%.

Prior to today's trading, shares of the world's largest retailer had gained 1.85% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.3% and the S&P 500's gain of 3.55% in that time.

Market participants will be closely following the financial results of Walmart in its upcoming release. On that day, Walmart is projected to report earnings of $0.52 per share, which would represent year-over-year growth of 6.12%. In the meantime, our current consensus estimate forecasts the revenue to be $158.89 billion, indicating a 4.33% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.36 per share and a revenue of $671.5 billion, representing changes of +6.31% and +3.61%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Walmart. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. Walmart is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Walmart is currently trading at a Forward P/E ratio of 25.78. This expresses a premium compared to the average Forward P/E of 12.92 of its industry.

We can additionally observe that WMT currently boasts a PEG ratio of 3.97. 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. Retail - Supermarkets stocks are, on average, holding a PEG ratio of 1.25 based on yesterday's closing prices.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 28, positioning it in the top 12% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Walmart Inc. (WMT) - free report >>

Published in