Here’s what Wall Street experts are saying about Walmart ahead of earnings

Walmart (WMT) is scheduled to report results of its fourth quarter before the market open on Tuesday, February 20, with a conference call scheduled for 8:00 am EDT. What to watch for:

GUIDANCE: In November, Walmart raised its fiscal 2024 adjusted earnings per share view to $6.40-$6.48 from $6.36-$6.46 and its revenue view to up 5%-5.5% from up 4%-4.5%. Analysts currently expect EPS of $6.48 on revenue of $645.23B for the fiscal year. On January 30, Walmart announced a 3-for-1 stock split, part of its ongoing review of optimal trading and spread levels and its desire for its associates to feel that purchasing shares is easily within reach. “Sam Walton believed it was important to keep our share price in a range where purchasing whole shares, rather than fractions, was accessible to all of our associates,” said Doug McMillon, President and CEO of Walmart. “Given our growth and our plans for the future, we felt it was a good time to split the stock and encourage our associates to participate in the years to come.”

TALKS TO BUY VIZIO: Walmart is in talks to buy smart television maker Vizio (VZIO) for more than $2B, people familiar with the matter told The Wall Street Journal’s Jessica Toonkel and Sarah Nassauer. Walmart, including its Sam’s Club chain, has historically been Vizio’s largest customer and such a deal would give Walmart more places where it can sell ads and pitch shoppers on goods, the report said. JPMorgan views the report credibly and sees the strategic merits of a potential deal for both companies. The firm said Walmart could accelerate Vizio’s SmartCast scale, which currently has 18M active accounts versus Roku‘s (ROKU) 76M.

Barrington said a purchase of Vizio would provide Walmart with greater exposure to advertising and appears plausible in strategic terms. With multiple avenues for upside from a potential combination, an acquisition should adequately reflect incremental growth Vizio would enable, the analyst said.

TACTICAL UNDERPERFORM: Evercore ISI initiated a negative “Tactical Trading Call” on Walmart ahead of the Q4 earnings and added the stock to the firm’s “Tactical Underperform” list. While the firm believes Walmart is likely to meet Street estimates for Q4, it sees potential near term downside of “around mid single digits for the stock” due to what it believes will likely be conservative guidance and tone on the consumer. With short interest just 2% and most investors positively biased toward the name, Evercore sees risk for “a mild near term correction for the stock,” added the analyst.

GOOD MOMENTUM: The company’s upcoming Q4 print and its FY24 outlook should provide more optimism on the sustainability of its recent share gains and its future potential, and these attributes should look all the more compelling as several macro uncertainties weigh on retail in the year ahead, namely the uncertain health of the US consumer, food disinflation, and wavering demand for general merchandise, UBS told investors in a research note.

SENTIMENT: Click here to check out recent Media Buzz Sentiment on Walmart as measured by TipRanks.