Retail giant Walmart (NYSE:WMT) is expected to announce fourth-quarter Fiscal Year 2023 earnings on February 21, before the market opens. The company, with its low-pricing policy and expansion of e-commerce offerings, might have attracted more customers. Furthermore, TipRanks’ website traffic tool shows improving trends.
According to the tool, the number of unique visits to walmart.com and its two other websites increased 18.3% year-over-year in Q4. The increase in visits could indicate that demand for the company’s products remained upbeat during the quarter.
Walmart Q4 Factors
The quarter witnessed a slowdown in consumer discretionary spending due to the challenging macroeconomic environment. This is less likely to have impacted Walmart’s results as 56% of its revenues come from the sales of grocery items (a necessity) in the U.S.
Moreover, its Sam’s Club segment is expected to continue to deliver stellar growth on the back of a rising member count. Also, the company’s efforts to reduce expenses are likely to have supported the profits.
Nevertheless, the strengthening of the U.S. dollar in the to-be-reported quarter is likely to have hurt bottom-line growth to some extent.
The Street expects Walmart to post earnings of $1.52 per share in Q4, compared with $1.53 per share in the year-ago quarter. Meanwhile, revenue expectations are pegged at $159.76 billion, representing a year-over-year growth of 4.5%.
Is Walmart Stock a Buy, Sell, or Hold?
Ahead of Q4 earnings, Evercore ISI analyst Greg Melich maintained a Hold rating on the stock with a price target of $150. The analyst expects fourth-quarter results to benefit from higher sales along with market share gain in the grocery segment.
Overall, Walmart has a Strong Buy consensus rating based on 16 Buys and three Holds assigned in the past three months. The average WMT stock price target of $163.37 implies a 11.56% upside potential. WMT stock is up about 2% year-to-date.
Ending Thoughts
Walmart’s digital strategy, expansion of its international footprint, and excellent brand name among its customer base continue to support performance. Also, the company’s same-day delivery option and robotic automation to help retrieve and dispense orders have helped boost sales from the physical stores.
The recession fear, however, is hurting the company’s sales and margins to an extent. This is because many customers try to prepare for the worst by saving every penny possible.
