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Is Walmart (WMT) Set to Beat Q1 Earnings Estimates This Week?

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Shares of Walmart (WMT - Free Report) opened higher on Monday as investors assess how the retail powerhouse might perform in the first quarter. With that said, let’s take a look at some of Walmart’s latest Q1 estimates to see what investors should really expect from Walmart’s Q1 financial results during a big week for retailers.

Walmart stock is up 9% over the last year, but its shares have fallen 19% during the last 12 weeks. The recent downturn comes after the company reported relatively solid fourth quarter results. Much of the concern likely comes from Walmart’s e-commerce sales, which slowed in Q4 after a sustained stretch of massive growth.

Walmart’s e-commerce sales still surged over 20% from the year-ago period, but as Amazon (AMZN - Free Report) and other online sellers continue to expand, investors have become increasingly worried about the long-term growth prospects of big-box powers. This means that Walmart will likely have to report strong top and bottom line numbers on Thursday in order to impress investors.

Walmart Q1 Outlook

Our current Zacks Consensus Estimate is calling for Walmart’s quarterly revenues to climb by 2.2% to reach $120.13 billion. On the other end of the income statement, the retailer’s Q1 earnings are projected to surge 13% to reach $1.13 per share.

Moving on, investors will also want to understand what chance Walmart has to top our earnings estimate as this can often lead to positive stock price movement in the near-term. Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to surprise, either way.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

In contrast, a stock with a Zacks Rank #3 (Hold) or worse, coupled with a negative Earnings ESP, is one that we typically want to avoid during earnings season.

Walmart’s Most Accurate Estimate—the representation of the most recent analyst sentiment—calls for earnings of $1.14 per share, which comes in 1 cent above our current consensus estimate. The company is also currently a Zacks Rank #3 (Hold) and sports an Earnings ESP of 0.77%.

Therefore, investors should consider Walmart a stock that could top quarterly earnings estimates when it reports its Q1 financial results before the market opens on Thursday.

Other retail giants, including Macy’s (M - Free Report) , J. C. Penney (JCP - Free Report) , and Nordstrom (JWN - Free Report) also report their quarterly earnings result this week. So make sure to come back here for complete breakdowns!

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