Wal-Mart Stores, Inc. Fails To Impress

Wal-Mart Stores, Inc. Fails To Impress

By Carly Forster

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Wal-Mart Stores, Inc. (NYSE:WMT) is a Bentonville, Arkansas based American multinational retail corporation that maintains multiple large discount department stores and warehouses throughout the world. The retail giant released its second-quarter earnings report on Thursday, August 14th before the opening bell and its results were rather flat.

During its Q2 results, Wal-Mart reported $1.21 Non-GAAP earnings per share, matching analysts’ consensus estimate. During the same quarter last year, the retail giant posted $1.23 earnings per share. Wal-Mart had a profit of $119.30 billion for the quarter, compared to analysts’ consensus estimate of $119.00 billion. The company’s quarterly revenue was down 0.6% on a year-over-year basis. On average, analysts expect that Wal-Mart will post $5.05 earnings per share for the current fiscal year.

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Although Wal-Mart’s quarterly earnings per share were on par with what analysts were expecting, investors and financial experts were disappointed with the company’s lower full year EPS guidance of $4.90 to $5.15, from a previous range of $5.10 to $5.45. New CEO Doug McMillion said of the results in a statement, “I’m pleased with our solid earnings per share performance… As it relates to the positives from the quarter, I’m encouraged by the performance of our International business, our Neighborhood Market sales in the U.S. and by our e-commerce growth. As it relates to our challenges in the quarter, we wanted to see stronger comps in Walmart U.S. and Sam’s Club, but both reported flat comp sales. Stronger sales in the U.S. businesses would’ve also helped our profit performance.”

Shares of Wal-Mart opened at $74.65 on Friday, August 15th. The retail giant has a 1-year high of $81.37 and a 1-year low of $71.51. The stock’s daily moving average is $74.04 and has a 50-day moving average of $75.46. The market cap for Wal-Mart Stores, Inc. (NYSE:WMT) is $238.70 billion and its P/E ratio is 15.26.

On August 15th, Raymond James analyst Budd Bugatch reiterated an Outperform rating on Wal-mart, but lowered his price target from $83 to $80 due to the company’s lukewarm earnings forecast. Bugatch has a +18.0% average return on all stocks he has rated and a 61% success rate in making recommendations. He also has a +0.9% average return on Wal-Mart stock and is ranked #248 out of 3242 analysts on TipRanks.

Separately on August 15th, JP Morgan analyst Christopher Horvers maintained a Neutral rating for Wal-Mart and lowered his price target from $80 to $78. Horvers has a +0.9% average return on all stocks he has rated and a 62% success rate in making recommendations. He is ranked #1906 out of 3242 analysts.

Both of these analysts agree that Wal-Mart should be in your portfolios, but one see’s more of an upside with the stock than the other. Whose recommendation do you trust?

To see more recommendations for Wal-Mart Stores, Inc. (NYSE:WMT), visit TipRanks today!

Carly Forster writes about stock market news. She can be reached at Carly@tipranks.com

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