What to Watch For in Walmart Earnings

Print Email

Walmart Inc. (NYSE: WMT) is scheduled to release its fiscal first-quarter financial results before the markets open on Thursday. The consensus estimates from Thomson Reuters are $1.13 in earnings per share (EPS) on $120.51 billion in revenue. In the same period of last year, the retailer said it had EPS of $1.00 and $117.54 billion in revenue.

This retail powerhouse announced last week that it had pulled the trigger on a deal to acquire a controlling stake in India’s Flipkart Group, the country’s leading e-commerce platform. Walmart acquired a 77% stake in Flipkart for approximately $16 billion, which the company plans to fund through a combination of new debt and cash on hand.

The acquisition gives Walmart a significant position in the last huge market left that is not dominated by another company by blocking Amazon and Alibaba from gaining control of Flipkart.

It was announced last month that the current leader among U.S. consumers who buy most or all of their groceries online was Walmart, which grabs nearly 22% of these shoppers, compared to second-place Amazon, which attracts 12%.

Online sales of food and beverages will amount to just 2.4% of total 2018 sales that should approach $1 trillion. That’s a prize approaching $23 billion. The total U.S. grocery bill, including food and nonfood items, generates about $5.5 trillion in annual sales.

Excluding Wednesday’s move, Walmart had more or less kept pace with the broad markets, and its stock was up about 11% in the past 52 weeks. In just 2018 alone, Walmart’s stock was down 14%.

A few analysts weighed in on Walmart ahead of the report:

  • Morgan Stanley has a Hold rating and a $99 price target.
  • Loop Capital has a Hold rating with an $87 price target.
  • RBC has a Neutral rating with an $88 price target.
  • Credit Suisse has a Neutral rating with an $85 target.
  • Wells Fargo has a Neutral rating with an $85 target price.
  • Robert Baird has a Buy rating with a $95 price target.
  • Deutsche Bank has a Hold rating and an $87 price target.

Shares of Walmart were last seen up about 1% at $85.66, with a consensus analyst price target of $105.40 and a 52-week range of $73.13 to $109.98.

I'm interested in the Newsletter