What Analysts Are Saying About Wal-Mart After Earnings

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Wal-Mart Stores Inc. (NYSE: WMT) saw its shares hit a new multiyear high on Friday in the wake of a positive earnings report earlier on in the week. Following the earnings release, investors were very positive on the stock, and shares rose again on Friday after analysts had their say as well.

24/7 Wall St. has taken a look at the earnings report and included a few brief highlights from it, as well as what some analysts are saying afterward.

The retailing giant posted adjusted diluted earnings per share (EPS) of $1.00 on total revenues of $117.54 billion, versus consensus estimates that called for EPS of $0.96 and $117.74 billion in revenue. In the same period of last year, Wal-Mart reported EPS of $0.98 on revenues of $115.9 billion.

U.S. first-quarter same-store sales rose 1.4% at the company’s supercenter and discount stores. Same-store sales in the company’s Sam’s Club stores were up 1.6% excluding fuel sales and up 3% including fuel. Total U.S. net sales, including fuel, rose 1.5% for the quarter. U.S. traffic in stores was up 1.5% year over year.

Consolidated operating income rose 1.3% year over year in the first quarter. U.S. operating income rose 0.9% for the quarter while the company’s international segment saw a quarterly jump of 9%. Operating income at Sam’s Club stores rose 0.2% in the quarter.

Wal-Mart guided second-quarter EPS at $1.00 to $1.08, excluding an expected net benefit of $0.05 per share related to the sale of a Mexican subsidiary. Second-quarter same-store sales are expected to rise 1.5% to 2.0% at U.S. stores and 1.0% to 1.5% at Sam’s Club stores, excluding fuel sales. Consensus estimates call for second-quarter EPS of $1.07 and revenues of $122.73 billion.

Credit Suisse reiterated an Outperform rating with an $80 price target. The firm also commented in its report:

WMT’s momentum continued, as the company reported another quarter of relatively solid top-line performance while delivering its first increase in U.S. earnings in over three years. EPS of $1.00 beat consensus and our estimate of $0.96. While the U.S. comp increase of 1.4% was about as expected, traffic growth of 1.5% (which accelerated on a two and three year basis) and e-commerce growth (an 80 bps contribution) surprised to the upside.

Separately, a few other analysts weighed in:

  • Barclays has an Overweight rating and raised its price target to $90 from $82.
  • BMO upgraded it to Market Perform from Underperform and raised its price target to $80 from $63.
  • JPMorgan raised its price target to $80 from $68.
  • RBC raised its price target to $74 from $67.
  • Susquehanna raised its price target to $92 from $80.

Shares of Wal-Mart were last seen up 1.6% at $78.75 on Friday, with a consensus analyst price target of $77.49 and a 52-week trading range of $65.28 to $78.90.