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

Zacks Equity Research
·3 min read

Walmart (WMT) closed at $143.90 in the latest trading session, marking a +0.66% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.47%. At the same time, the Dow added 0.4%, and the tech-heavy Nasdaq gained 0.33%.

Prior to today's trading, shares of the world's largest retailer had gained 4.29% over the past month. This has lagged the Retail-Wholesale sector's gain of 7.48% and outpaced the S&P 500's gain of 3.42% in that time.

WMT will be looking to display strength as it nears its next earnings release, which is expected to be November 17, 2020. The company is expected to report EPS of $1.18, up 1.72% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $131.79 billion, up 2.97% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.35 per share and revenue of $551.18 billion, which would represent changes of +8.52% and +5.19%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for WMT. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.25% higher. WMT is currently a Zacks Rank #3 (Hold).

In terms of valuation, WMT is currently trading at a Forward P/E ratio of 26.74. This represents a premium compared to its industry's average Forward P/E of 15.1.

Meanwhile, WMT's PEG ratio is currently 4.86. 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. WMT's industry had an average PEG ratio of 2.49 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 42, which puts it in the top 17% 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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