Retail giant Walmart (NYSE:WMT) will report its first quarter fiscal 2024 financial results on Thursday, May 18. While pressure on consumers’ discretionary spending could weigh on general merchandise sales, WMT’s value pricing, the convenience of shopping, and wide range of product options will likely support its comparable sales in Q1.
Heading into earnings, Jefferies analyst Corey Tarlowe views Walmart as the best-positioned retailer in his coverage universe. Tarlowe expects WMT to benefit from growing market share and higher average selling prices.
In a note to investors dated May 11, Tarlowe said that he is raising his estimates above guidance and consensus to incorporate the benefits of ongoing momentum in the business and a slight price increase.
Analysts expect Walmart to post comparable sales of 5%. In comparison, Tarlowe projects WMT’s comparable sales to grow by 6.8%.
Overall, Wall Street expects Walmart to post revenue of $148.69 billion in Q1, higher than the total revenue of $141.6 billion reported in the prior-year quarter.
Along with Tarlowe, Guggenheim analyst Robert Drbul is also bullish about WMT stock ahead of earnings. On May 15, Drbul said that the retailer is better placed in an uncertain macro environment thanks to its price and value proposition. The analyst expects Walmart’s revenue to increase from higher grocery sales.
Higher sales and price increases could cushion WMT’s Q1 margins and earnings. However, merchandise mix pressure could limit the upside to its bottom line.
Wall Street expects Walmart to report earnings of $1.31 per share, reflecting a slight increase from the $1.30 reported in the prior-year period. Meanwhile, the company expects its Q1 earnings to be between $1.25 and $1.30 per share.
What’s the Prediction for WMT Stock?
Analysts are upbeat about WMT stock ahead of the Q1 print. It has 24 Buy and five Hold recommendations for a Strong Buy consensus rating. Further, analysts’ average price target of $165.64 implies 10.59% upside potential from current levels.