We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Time to Buy Walmart or Target Stock as Q3 Earnings Approach?
Read MoreHide Full Article
Third-quarter results from retail giants Walmart (WMT - Free Report) and Target (TGT - Free Report) will be a highlight of this week’s earnings lineup.
Both omnichannel retailers are expected to post sound quarterly growth with Walmart and Target set to release their Q3 reports on Tuesday, November 19, and Wednesday, November 20, respectively.
Walmart Q3 Expectations
Based on Zacks estimates, Walmart’s Q3 sales are expected to be up 4% to $167.49 billion. On the bottom line, Walmart’s Q4 EPS is projected to increase 4% as well to $0.53 versus $0.51 a year ago.
Walmart most recently surpassed Q2 earnings expectations by 3% in August with EPS at $0.67 compared to estimates of $0.65. Notably, Walmart has reached or exceeded the Zacks EPS Consensus for nine consecutive quarters posting an average earnings surprise of 6.89% in its last four quarterly reports.
Image Source: Zacks Investment Research
Target Q3 Expectations
Starting to reach its goals of curving inventory shrink, Target’s Q3 sales are projected to increase 2% to $25.94 billion. More importantly, Target’s Q3 EPS is expected to rise 9% to $2.29 versus $2.10 in the comparative quarter.
Target most recently beat Q2 EPS estimates by nearly 19% in August with earnings at $2.57 per share compared to expectations of $2.16. Target has surpassed the Zacks EPS Consensus in three of its last four quarterly reports posting a very impressive average earnings surprise of 20.26%.
Image Source: Zacks Investment Research
Tracking WMT & TGT:
Price Performance
Thanks to its low-cost offerings, consumers have gravitated toward Walmart amid higher inflation in recent years with the company also seeing considerable expansion in its online sales. This has been a primary catalyst to Walmart’s enhanced financial performance and ability to take market share with WMT soaring +60% year to date compared to the benchmark S&P 500’s +23% and Target’s +10%.
Image Source: Zacks Investment Research
Valuation Comparison
While Walmart’s stock has had a clear edge in terms of price performance, Target shares have stood out in terms of valuation. To that point, Target’s stock trades at 15.9X forward earnings which is a pleasant discount to the benchmark’s 24.8X with Walmart at 34.4X.
Furthermore, Target trades nicely beneath its decade-long high of 30.4X forward earnings and at a slight discount to its decade-median of 16.2X. As for Walmart, WMT trades on par with its own decade-long high of 34.7X but above the median of 22X during this period. Reassuringly, Walmart and Target both trade at the optimum level of less than 2X sales.
Image Source: Zacks Investment Research
WMT & TGT Dividends
In regards to dividends, Target has the edge here as well with a 2.95% annual yield that tops Walmart’s 0.99% and the S&P 500’s 1.22% average.
Image Source: Zacks Investment Research
Bottom Line
Ahead of their Q3 reports, Target’s stock sports a Zacks Rank #2 (Buy) with Walmart landing a Zacks Rank #3 (Hold). Magnifying Target’s more attractive P/E valuation is that earnings estimate revisions are noticeably higher over the last 90 days for its current fiscal 2025.
Meanwhile, Walmart’s current FY25 EPS estimates have remained unchanged in the last three months although both retail giants are expecting steady growth on their bottom lines for the foreseeable future.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Time to Buy Walmart or Target Stock as Q3 Earnings Approach?
Third-quarter results from retail giants Walmart (WMT - Free Report) and Target (TGT - Free Report) will be a highlight of this week’s earnings lineup.
Both omnichannel retailers are expected to post sound quarterly growth with Walmart and Target set to release their Q3 reports on Tuesday, November 19, and Wednesday, November 20, respectively.
Walmart Q3 Expectations
Based on Zacks estimates, Walmart’s Q3 sales are expected to be up 4% to $167.49 billion. On the bottom line, Walmart’s Q4 EPS is projected to increase 4% as well to $0.53 versus $0.51 a year ago.
Walmart most recently surpassed Q2 earnings expectations by 3% in August with EPS at $0.67 compared to estimates of $0.65. Notably, Walmart has reached or exceeded the Zacks EPS Consensus for nine consecutive quarters posting an average earnings surprise of 6.89% in its last four quarterly reports.
Image Source: Zacks Investment Research
Target Q3 Expectations
Starting to reach its goals of curving inventory shrink, Target’s Q3 sales are projected to increase 2% to $25.94 billion. More importantly, Target’s Q3 EPS is expected to rise 9% to $2.29 versus $2.10 in the comparative quarter.
Target most recently beat Q2 EPS estimates by nearly 19% in August with earnings at $2.57 per share compared to expectations of $2.16. Target has surpassed the Zacks EPS Consensus in three of its last four quarterly reports posting a very impressive average earnings surprise of 20.26%.
Image Source: Zacks Investment Research
Tracking WMT & TGT:
Price Performance
Thanks to its low-cost offerings, consumers have gravitated toward Walmart amid higher inflation in recent years with the company also seeing considerable expansion in its online sales. This has been a primary catalyst to Walmart’s enhanced financial performance and ability to take market share with WMT soaring +60% year to date compared to the benchmark S&P 500’s +23% and Target’s +10%.
Image Source: Zacks Investment Research
Valuation Comparison
While Walmart’s stock has had a clear edge in terms of price performance, Target shares have stood out in terms of valuation. To that point, Target’s stock trades at 15.9X forward earnings which is a pleasant discount to the benchmark’s 24.8X with Walmart at 34.4X.
Furthermore, Target trades nicely beneath its decade-long high of 30.4X forward earnings and at a slight discount to its decade-median of 16.2X. As for Walmart, WMT trades on par with its own decade-long high of 34.7X but above the median of 22X during this period. Reassuringly, Walmart and Target both trade at the optimum level of less than 2X sales.
Image Source: Zacks Investment Research
WMT & TGT Dividends
In regards to dividends, Target has the edge here as well with a 2.95% annual yield that tops Walmart’s 0.99% and the S&P 500’s 1.22% average.
Image Source: Zacks Investment Research
Bottom Line
Ahead of their Q3 reports, Target’s stock sports a Zacks Rank #2 (Buy) with Walmart landing a Zacks Rank #3 (Hold). Magnifying Target’s more attractive P/E valuation is that earnings estimate revisions are noticeably higher over the last 90 days for its current fiscal 2025.
Meanwhile, Walmart’s current FY25 EPS estimates have remained unchanged in the last three months although both retail giants are expecting steady growth on their bottom lines for the foreseeable future.