Walmart Stock Surges on Q1 Earnings Beat, Strong Outlook

Walmart (WMT) stock jumped more than 6% out of the gate Thursday after the retail giant beat top- and bottom-line expectations for its first quarter and issued strong guidance.

In the three months ended April 30, Walmart's revenue increased 6% year-over-year to $161.5 billion, driven by a 21% increase in global e-commerce sales. Its earnings per share (EPS) surged 22.4% to 60 cents. At Walmart U.S. and Sam's Club, same-store sales increased 3.8% and 4.4%, respectively, excluding fuel.

"Our team delivered a great quarter," Walmart CEO Doug McMillon said in a statement. "Around the world our goal is simple - we're focused on saving our customers both money and time.”

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The results handily beat analysts' expectations. According to Yahoo Finance, Wall Street anticipated revenue of $159.5 billion and EPS of 52 cents.

As a result of its strong start to the year, Walmart said it now expects its fiscal 2025 full-year results to be at the high-end or slightly above its original guidance. Specifically, this called for consolidated net sales growth in the range of 3% to 4% and EPS to arrive between $2.23 to $2.37, up 3.6% year-over-year at the midpoint.

Walmart also provided its guidance for the second quarter. It expects consolidated net sales growth in the range of 3.5% to 4.5% and EPS in the range of 62 cents to 65 cents.

The Q2 guidance satisfies analysts' expectations, which call for revenue of $167.5 billion, representing growth of 3.7% from the year-ago period, and EPS of 64 cents.

Is Walmart stock a buy or hold?

Analysts' remain bullish on the world’s largest retailer amid its impressive run higher this year. Indeed, shares are up more than 21% on a total return basis (price change plus dividends), making it one of the best-performing Dow Jones stocks of 2024.

Speaking for the bulls is Deutsche Bank analyst Krisztina Katai, who has a Buy rating on the blue chip stock. The analyst was optimistic heading into Walmart's Q1 print even amid "a volatile consumer spending backdrop" and "increased concerns on the health of the low-end consumer." 

Katai believes Walmart's recent share gains are sustainable given its "very strong pricing position" and "incremental rollback activity." The analyst also feels WMT's "premium private label push will help drive volume and retain higher income households."

According to S&P Global Market Intelligence, the consensus analyst target price for WMT stock is $65.64, representing implied upside of just over 3% to current levels. Meanwhile, the consensus recommendation is Buy. 

However, it's important to note that analysts may increase their price targets in the days and weeks ahead after the strong Q1 report.

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