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The Zacks Analyst Blog Highlights Walmart, Amazon.com, Best Buy and Target
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For Immediate Release
Chicago, IL – August 14, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Walmart Inc. (WMT - Free Report) , Amazon.com, Inc. (AMZN - Free Report) , Best Buy Co., Inc.'s (BBY - Free Report) and Target Corp. (TGT - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Walmart Just Overtook 50DMA Before Q2 Earnings: Time to Buy?
This year has been imposing for Walmart Inc., with its shares soaring 30.7% year to date, slightly more than the Retail - Supermarkets industry's gain of 28.3%. The big-box retailers' shares did break out beyond their resistance level in mid-May to register a sustained northward movement.
What's more, Walmart's stock price closed at $68.70 on Aug 12, just above its 50-day moving average (DMA) of $68.43, signifying a further short to medium-term positive uptrend.
What's Behind Walmart's Uptrend?
Walmart's shares have been scaling upward primarily due to the company's investments in artificial intelligence (AI), which has the potential to boost its profit margins by streamlining operations. Its automation investments, like an automated cart-checking system and autonomous forklift manufacturer, are expected to increase Walmart's earnings before interest and taxes (EBIT) in the long run.
Walmart's e-commerce and ad business continue to be growth drivers. Walmart tweaked its online selling platform by letting third-party sellers promote their products. Such an incredible move helped Walmart improve online sales in recent times. Walmart successfully penetrated the ever-growing e-commerce market, where Amazon.com, Inc. is already a tough contender.
Walmart's adoption of Best Buy Co., Inc.'s ship-from-store model has already helped the retail behemoth's e-commerce business reach $100 billion in annual sales in 2023. At the same time, Walmart's ad business is thriving as it notched a compounded annual growth rate of 27.2% over the past three years. In reality, Walmart's ad business increased in the first fiscal quarter of 2024, thanks to the company's acquisition of a smart TV maker, Vizio, for $2.3 billion.
Unlike rival retailer Target Corp., Walmart's same-store sales increased in the fiscal first quarter and drove the company's revenues and share prices higher. Same-store sales jumped as Walmart stores offered more consumer staple items, whereas Target sold discretionary goods like apparel.
Positive Q2 Earnings to Boost Stock Price Further
Walmart's fruitful promotion of its subscription-based programs and sales holding up at retail outlets in the prior couple of months should certainly help the company post encouraging second fiscal quarter earnings results, slated to be reported on Aug 15, before the stock market opens.
Walmart is estimated to report an earnings per share of 65 cents for the fiscal second quarter, more than 61 cents a year ago, indicating an increase of nearly 6.6%. Furthermore, Walmart has an average four-quarter positive earnings surprise of 8.3%, a revealing sign that the stock has a fair chance to display superb earnings growth in the upcoming earnings announcement, leading to an uptick in the share price.
Therefore, major brokerage firms have increased the average short-term price target of WMT by 8.5% from the retailer's last closing price of $67.95. The analysts have set the highest price target at $82.
Valuation Expensive, But Indicates Growth
Walmart stock is undeniably pricey at the moment. By looking at the Price/Earnings ratio, Walmart stock currently trades at 28.2X forward earnings. However, the Retail-Supermarkets industry's forward earnings multiple is 25.7X.
But this certainly indicates that market participants believe that Walmart's stock can make more profits sooner or later, leading to an increase in its demand and price as well.
Walmart – An Enticing Buy
With Walmart's share price on a bullish trajectory, it's prudent for astute investors to place bets on the stock for striking returns. The company has already been able to generate profits proficiently since WMT has a return on equity (ROE) of 21.6%. Any ROE above 20% is typically considered very strong.
The Zacks Consensus Estimate for WMT's current-year earnings has increased almost 3% over the past 90 days. The company's expected earnings growth rate for the current year is 9.5%. Thus, rightfully, WMT has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Walmart, Amazon.com, Best Buy and Target
For Immediate Release
Chicago, IL – August 14, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Walmart Inc. (WMT - Free Report) , Amazon.com, Inc. (AMZN - Free Report) , Best Buy Co., Inc.'s (BBY - Free Report) and Target Corp. (TGT - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Walmart Just Overtook 50DMA Before Q2 Earnings: Time to Buy?
This year has been imposing for Walmart Inc., with its shares soaring 30.7% year to date, slightly more than the Retail - Supermarkets industry's gain of 28.3%. The big-box retailers' shares did break out beyond their resistance level in mid-May to register a sustained northward movement.
What's more, Walmart's stock price closed at $68.70 on Aug 12, just above its 50-day moving average (DMA) of $68.43, signifying a further short to medium-term positive uptrend.
What's Behind Walmart's Uptrend?
Walmart's shares have been scaling upward primarily due to the company's investments in artificial intelligence (AI), which has the potential to boost its profit margins by streamlining operations. Its automation investments, like an automated cart-checking system and autonomous forklift manufacturer, are expected to increase Walmart's earnings before interest and taxes (EBIT) in the long run.
Walmart's e-commerce and ad business continue to be growth drivers. Walmart tweaked its online selling platform by letting third-party sellers promote their products. Such an incredible move helped Walmart improve online sales in recent times. Walmart successfully penetrated the ever-growing e-commerce market, where Amazon.com, Inc. is already a tough contender.
Walmart's adoption of Best Buy Co., Inc.'s ship-from-store model has already helped the retail behemoth's e-commerce business reach $100 billion in annual sales in 2023. At the same time, Walmart's ad business is thriving as it notched a compounded annual growth rate of 27.2% over the past three years. In reality, Walmart's ad business increased in the first fiscal quarter of 2024, thanks to the company's acquisition of a smart TV maker, Vizio, for $2.3 billion.
Unlike rival retailer Target Corp., Walmart's same-store sales increased in the fiscal first quarter and drove the company's revenues and share prices higher. Same-store sales jumped as Walmart stores offered more consumer staple items, whereas Target sold discretionary goods like apparel.
Positive Q2 Earnings to Boost Stock Price Further
Walmart's fruitful promotion of its subscription-based programs and sales holding up at retail outlets in the prior couple of months should certainly help the company post encouraging second fiscal quarter earnings results, slated to be reported on Aug 15, before the stock market opens.
Walmart is estimated to report an earnings per share of 65 cents for the fiscal second quarter, more than 61 cents a year ago, indicating an increase of nearly 6.6%. Furthermore, Walmart has an average four-quarter positive earnings surprise of 8.3%, a revealing sign that the stock has a fair chance to display superb earnings growth in the upcoming earnings announcement, leading to an uptick in the share price.
Therefore, major brokerage firms have increased the average short-term price target of WMT by 8.5% from the retailer's last closing price of $67.95. The analysts have set the highest price target at $82.
Valuation Expensive, But Indicates Growth
Walmart stock is undeniably pricey at the moment. By looking at the Price/Earnings ratio, Walmart stock currently trades at 28.2X forward earnings. However, the Retail-Supermarkets industry's forward earnings multiple is 25.7X.
But this certainly indicates that market participants believe that Walmart's stock can make more profits sooner or later, leading to an increase in its demand and price as well.
Walmart – An Enticing Buy
With Walmart's share price on a bullish trajectory, it's prudent for astute investors to place bets on the stock for striking returns. The company has already been able to generate profits proficiently since WMT has a return on equity (ROE) of 21.6%. Any ROE above 20% is typically considered very strong.
The Zacks Consensus Estimate for WMT's current-year earnings has increased almost 3% over the past 90 days. The company's expected earnings growth rate for the current year is 9.5%. Thus, rightfully, WMT has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.