Is Walmart Stock Still a Buy After Earnings?
Walmart stock is surging after Thursday after the discount retailer's beat-and-raise quarter. Here's what investors need to know.
Walmart (WMT) stock is one of the best Dow Jones stocks Thursday after the retail giant beat top- and bottom-line expectations for its fiscal second quarter and raised its full-year outlook.
In the three months ended July 31, Walmart's revenue increased 4.8% year-over-year to $169.3 billion, thanks in part to a 21% spike in global e-commerce sales. Its earnings per share (EPS) improved 9.8% from the year-ago period to 67 cents. At Walmart U.S. and Sam's Club, same-store sales were up 4.2% and 5.2%, respectively, excluding fuel.
"Our team delivered another strong quarter," said Walmart CEO Doug McMillon in a statement. "Each part of our business is growing – store and club sales are up, e-commerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves. Our newer businesses like marketplace, advertising, and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model."
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The results topped analysts' expectations. Wall Street was anticipating revenue of $168.5 billion and earnings of 65 cents per share, according to Yahoo Finance.
As a result of its strong first half, Walmart raised its full-year outlook. The company now expects fiscal 2025 revenue growth in the range of 3.75% to 4.75% and earnings per share to arrive between $2.35 to $2.43, up from its previous forecast of revenue growth between 3% to 4% and EPS of $2.23 to $2.37.
Walmart also provided guidance for its fiscal third quarter, calling for revenue to grow between 3.25% to 4.25% and earnings per share of 51 cents to 52 cents.
Is Walmart stock a buy, sell or hold?
Walmart has been the best Dow stock so far in 2024, up nearly 40% including today's pop. Unsurprisingly, Wall Street is overwhelmingly bullish on the blue chip stock.
For one, the consensus recommendation among the 40 analysts following WMT tracked by S&P Global Market Intelligence is a Buy and with strong conviction to boot. However, analysts have had a hard time keeping up with Walmart's impressive rally. Indeed, the average price target of $73.94 is right around where the stock is trading today. Price-target hikes could come down the pike after the positive earnings reaction.
"Those who have been following our work know that we have declared Walmart the poster child of our investing theme: Companies who have pivoted to digitization, robotics, the cloud and generative AI (and the suppliers of the picks and shovels)," said Nancy Tengler, CEO and chief investment officer of Laffer Tengler Investments, in a statement.
Tengler adds that Walmart is the investment firm's biggest holding among large-cap stocks in the consumer staples sector.
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