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On Thursday, Goldman Sachs reaffirmed its Buy rating and a $99.00 price target on Walmart shares (NYSE: NYSE:WMT). The retail giant, now commanding a market capitalization of $775 billion, saw its first-quarter adjusted earnings per share (EPS) of $0.61 exceed both Goldman Sachs and consensus estimates, which were pegged at $0.58. According to InvestingPro data, the stock has delivered an impressive 63.5% return over the past year, though it currently trades above its calculated Fair Value. Walmart’s U.S. same-store sales (SSS) saw a 4.5% increase, outperforming the consensus forecast of 3.9%. This growth was attributed to a rise in customer traffic by 1.6% and an average ticket increase of 2.8%. InvestingPro analysis reveals the company maintains strong financial health with a "GOOD" overall score, supported by robust profit and price momentum metrics. Get access to 12+ exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
In terms of performance by category, Walmart’s grocery segment experienced a mid-single-digit (MSD) increase, with a notable rise in transactions and units. This was accompanied by inflation of approximately 150 basis points, largely due to the cost of eggs. The health and wellness department saw significant growth in the high-teens range, driven by a higher number of prescriptions filled, a shift in consumer preference towards branded products over generics, and robust over-the-counter sales.
However, general merchandise sales were slightly down, with an increase in unit volumes overshadowed by mid-single-digit like-for-like deflation. Seasonal events performed well, but sales in electronics, home, and sporting goods were weak, compensated by stronger sales in toys, automotive, and children’s apparel.
Walmart’s global and U.S. e-commerce net sales grew by 22% and 21%, respectively, compared to the fourth quarter’s growth of 16% and 20%. Advertising revenue also showed a remarkable increase, with global and U.S. figures rising by 50%, including contributions from VIZIO, and 31% excluding VIZIO, in contrast to the 29% and 24% growth observed in the previous quarter. The company’s strong performance is reflected in its impressive total revenue of $681 billion and a consistent dividend history, having maintained payments for 53 consecutive years with a current yield of 0.97%. Discover more detailed insights and metrics with a InvestingPro subscription, including access to the comprehensive Pro Research Report available for Walmart and 1,400+ other top stocks.
In other recent news, Walmart reported a strong start to the year, with first-quarter adjusted earnings per share (EPS) reaching $0.61, surpassing both analyst and consensus estimates of $0.58. The company’s adjusted operating income grew by 3.0%, exceeding guidance expectations. Despite the robust financial performance, Walmart maintained its full-year guidance without specific second-quarter EPS or operating income forecasts. Analysts from Barclays (LON:BARC), BMO Capital, Truist Securities, Evercore ISI, and UBS have all reaffirmed their positive outlooks on Walmart, with price targets ranging from $105 to $110. Barclays noted Walmart’s consistent comparable store sales and growth in key areas such as membership and e-commerce. BMO Capital and UBS emphasized Walmart’s ability to navigate economic uncertainties, including tariffs, while maintaining a strong market position. Evercore ISI highlighted Walmart’s strategic advantages and resilience in the face of external challenges. Truist Securities pointed out the company’s solid U.S. comparable sales growth and overall sales momentum. These developments underscore Walmart’s ongoing strength in the retail sector.
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