Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Tuesday, Evercore ISI reiterated its Outperform rating on Walmart Inc. (NYSE:WMT) shares, maintaining a price target of $105. With a current market capitalization of $774 billion and a P/E ratio of 39.9x, InvestingPro analysis indicates Walmart is trading above its Fair Value. The firm’s analysts expect Walmart to report first-quarter earnings that align with the broadened market expectations. The forecast suggests Walmart’s operating income will remain relatively flat despite a projected 4% increase in comparable sales. This stability comes after a period of peak tariff uncertainty, which Evercore ISI believes is beginning to subside. According to InvestingPro data, Walmart has demonstrated strong financial resilience with revenue growth of 5.07% over the last twelve months and maintains a GOOD overall financial health score.
The analysts at Evercore ISI predict Walmart’s second-quarter earnings per share (EPS) to be close to consensus estimates, at $0.58, compared to the street’s $0.57. They anticipate the company to demonstrate resilience, supported by a robust consumer spending environment and easing China tariff tensions. The firm also noted Walmart’s unchanged full-year guidance during its analyst day in early April, indicating sustained momentum.
The report highlighted Walmart’s strategic advantages, including market share gains and supply chain strengths, while acknowledging that the retailer is not entirely insulated from external challenges such as tariffs, volatile exchange rates, and fluctuations in lower-income consumer spending. One notable strength revealed by InvestingPro is Walmart’s impressive dividend track record, having raised dividends for 30 consecutive years. This is just one of 12 valuable ProTips available to InvestingPro subscribers, along with comprehensive financial analysis and expert insights. Evercore ISI expressed a long-term bullish outlook on Walmart’s potential to drive sustainable traffic and expand its global earnings before interest and taxes (EBIT) margin, praising the company’s execution and innovation.
Walmart’s performance was further dissected with Evercore ISI modeling a 3.4% increase in net sales and $0.58 EPS for the first quarter, slightly above the street’s expectations of a 2.6% sales increase and $0.57 EPS. The company’s strong market performance is evident in its 61.8% total return over the past year, significantly outperforming broader market indices. The firm’s analysis suggests Walmart U.S. and Sam’s Club will post comparable sales growth of 4.1% and 6.0%, respectively, outpacing the street’s projections. These figures were supported by data indicating market share gains and consumer behavior influenced by tariff changes.
The report concluded with insights into Walmart’s financial aspects, noting that margins may remain flat or decline slightly year-over-year. Factors such as alternative profit streams, pricing strategies, and legal expenses were considered in the assessment. Evercore ISI also pointed out that while selling, general, and administrative expenses (SG&A) are expected to be well-managed, foreign exchange fluctuations and the near-term dilution from Vizio are potential risks. International performance in the first quarter is anticipated to lag compared to the second quarter due to the timing of Easter and the impact of reporting lags in some markets.
In other recent news, Walmart Inc. is poised for its upcoming first-quarter earnings report, with analysts showing varied expectations. UBS analyst Michael Lasser maintained a Buy rating with a $110 price target, expressing confidence in Walmart’s ability to demonstrate consistent earnings despite economic pressures like tariffs. RBC Capital Markets also upheld an Outperform rating and a $102 price target, though they noted some inconsistency in sales trends and higher-than-expected expenses. Meanwhile, Morgan Stanley (NYSE:MS) reaffirmed an Overweight rating with a $115 target, highlighting a significant increase in Walmart+ membership, which has reached new heights. This growth in membership is contributing to Walmart’s alternative profit model, particularly through loyalty and eCommerce penetration.
DA Davidson also maintained a Buy rating, with a $117 price target, anticipating that Walmart’s first-quarter earnings will show market share gains despite potential margin pressures. In a notable development, Walmart and Alquist completed a construction milestone at the Owens Cross Roads Supercenter using advanced 3D Concrete Printing technology. This project demonstrated increased speed and cost efficiency in construction, with 5,000-square-foot walls built in just one week. The collaboration underscores the evolving capabilities in the construction industry and Walmart’s commitment to innovation and cost reduction. As these developments unfold, investors are keenly awaiting Walmart’s earnings report on May 15, 2025, for further insights into the company’s performance and market strategy.
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