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Walmart (WMT) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Walmart (WMT - Free Report) closed at $117.36, marking a +1.03% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.67%. Elsewhere, the Dow gained 0.74%, while the tech-heavy Nasdaq added 0.81%.

Heading into today, shares of the world's largest retailer had lost 2.39% over the past month, lagging the Retail-Wholesale sector's gain of 4.06% and the S&P 500's gain of 3.55% in that time.

Wall Street will be looking for positivity from WMT as it approaches its next earnings report date. This is expected to be February 18, 2020. The company is expected to report EPS of $1.44, up 2.13% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $142.66 billion, up 2.78% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.98 per share and revenue of $525.80 billion, which would represent changes of +1.43% and +2.21%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for WMT. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.11% higher. WMT is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that WMT has a Forward P/E ratio of 23.31 right now. For comparison, its industry has an average Forward P/E of 14.35, which means WMT is trading at a premium to the group.

It is also worth noting that WMT currently has a PEG ratio of 4.7. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Supermarkets was holding an average PEG ratio of 2.64 at yesterday's closing price.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 25, which puts it in the top 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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