Big-box retailer Walmart (NYSE:WMT) is set to release its second-quarter Fiscal 2024 results on August 17 before the market opens. Current macroeconomic headwinds, namely persistently high inflation, stiff competition, and foreign exchange impacts, could have hurt Walmart’s performance in the quarter. Even so, analysts remain optimistic regarding the possibility of a solid quarterly performance from the company on the back of several tailwinds.
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Wall Street expects WMT to post adjusted earnings of $1.70 per share on revenues of $160.14 billion. In the prior-year quarter, WMT posted an adjusted profit of $1.77 per share on revenues of $152.86 billion.
What Analysts’ Expect from Walmart’s Q2 Print
Heading into WMT’s Q2 print, Robert W. Baird analyst Peter Benedict expects the retailer to post beat-and-raise results. The five-star analyst has a Buy rating and a $165 price target on Walmart stock (implying 3.7% upside potential).
Despite the weakness in the retail sector, tailwinds specific to Walmart, including continued share gains, momentum in alternative revenue streams, positive traffic growth, expanding EBIT (earnings before interest and tax) margins, and an improving return on its investments, should help WMT outperform.
Similarly, Guggenheim analyst Robert Drbul raised the price target on WMT stock to $180 (implying 13.1% upside) from $170 while maintaining his Buy rating. Drbul believes Walmart is well-poised despite the uncertain macro backdrop. He attributes the retailer’s price and value proposition, increased convenience and product range, and the potential for alternative revenue streams to aid in outperforming expectations.
Moreover, Walmart’s foray into the lucrative media business (advertising), coupled with continued momentum in fulfillment services, healthcare, and financial services segments, poses potential long-term winning opportunities.
Even analyst Greg Milech of Evercore ISI is highly optimistic about Walmart’s results and added the stock to his “Tactical Outperform List.” Factors such as robust traffic trends, share gains, and margin improvements could drive Walmart’s beat-and-raise results for Q2. Milech has a price target of $180 (again, implying 13.1% upside) and a Buy rating on the WMT stock.
Is Walmart Stock a Good Buy Now, According to Analysts?
Seeing the confidence of the Street in Walmart’s results, the stock commands a Strong Buy consensus rating on TipRanks. This is based on the optimism of 24 analysts who have given WMT a Buy rating versus four analysts who have assigned a Hold rating. The average Walmart stock price target of $174.07 implies 9.3% upside potential from current levels. Meanwhile, WMT stock has gained 12.1% so far this year.
Insights from Options Trading Activity
TipRanks now presents options activity to help investors plan their trades ahead of earnings releases. Options traders are pricing in WMT stock to move by +/-3.54% after reporting earnings. Last quarter, the stock climbed by 1.3% following the Q1-2024 results, which surpassed earnings estimates.
The anticipated earnings move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Key Takeaways
Wall Street remains highly bullish about Walmart’s outperformance in the quarter. Food inflation seems to be moderating, and traffic is likely increasing. Several tailwinds detailed above are poised to help Walmart report healthy beat-and-raise results, as per analysts.
