What to Look for When Wal-Mart Reports Earnings

Wal-Mart Stores Inc. (NYSE: WMT) is set to report its fiscal first-quarter financial results before the markets open on Thursday. The Thomson Reuters consensus estimates are $0.88 in earnings per share (EPS) on $113.22 billion in revenue. In the same period of last year, the retailer posted EPS of $1.03 and $114.83 billion in revenue.

This company runs the most popular store in America. More than half of all shoppers in the country visit a Wal-Mart location in a given month. No other U.S. store can claim a majority of Americans as customers.

Wal-Mart is by far the largest retailer in the United States and the world. The retail giant reported net sales of $478.6 billion in 2015, down from $482.2 billion the year before but still a larger revenue than the gross domestic product of most countries.

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While foot traffic may have declined and will fluctuate over the course of the year, Wal-Mart’s position at the top has been undisputed for many years.

A few analysts weighed in on Wal-Mart prior to the release of its earnings report:

• JPMorgan reiterated a Neutral rating.
• Robert Baird reiterated a Buy rating with a $70 price target.
• Jefferies reiterated a Hold rating with a $60 price target.
• Deutsche Bank reiterated a Hold rating.
• BMO Capital Markets reiterated a Sell rating with a $55 price target.
• Morgan Stanley has a Neutral rating with a $63 price target.
• RBC Capital has a Sell rating with a $66 price target.

So far in 2016, Wal-Mart has outperformed the broad markets, with the stock up nearly 8%. Over the past year, the stock is in fact down by 16%.

Shares of Wal-Mart were trading down 2.5% at $63.45 on Wednesday, with a consensus analyst price target of $65.04 and a 52-week trading range of $56.30 to $76.50.

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