Walmart (WMT) Stock Hits All-Time High Ahead of Thursday Earnings

TLDR

• Walmart stock hit an all-time high of $134.71, up 37% over the past year
• Options traders expect up to a 5% swing this week following Thursday’s earnings report
• Q1 revenue is expected at $174.94 billion, up ~6% year-over-year; EPS est. at 66 cents
• E-commerce sales are projected to have grown around 22% in the quarter
• Analyst price targets average just above $140, with 10 out of 11 analysts rating the stock a Buy

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Walmart stock touched a new all-time high of $134.71 on Monday, as investors position ahead of the retailer’s first-quarter earnings report due Thursday morning before the opening bell.

Walmart Inc., WMT

The stock is up roughly 20% since January 1, making it one of the stronger performers among large-cap retailers so far this year.

Based on current options pricing, traders are pricing in a move of up to 5% in either direction by the end of the week. On the upside, that would push WMT above $139 — past its February record. On the downside, a 5% drop would take it below $127.

Thursday’s report is the first earnings release under new CEO John Furner, who took over in February. The call will give Furner a chance to lay out his priorities for the company.

Wall Street expects first-quarter revenue of $174.94 billion, up nearly 6% year-over-year, according to Visible Alpha. Adjusted EPS is forecast at 66 cents, up 5 cents from the same quarter a year ago.

Comparable store sales are expected to have grown 3.8%, while e-commerce sales are projected to have climbed around 22%.

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What Analysts Are Saying

Analyst sentiment is firmly in Walmart’s corner. Of the 11 analysts tracked by Visible Alpha, 10 have a Buy rating and one is neutral. The average price target sits just above $140.

UBS is maintaining a Buy rating with a $147 target, while TD Cowen raised its target to $150, also with a Buy. KeyBanc reiterated an Overweight rating, pointing to market share momentum.

Oppenheimer expects a solid quarter but thinks Walmart will likely keep full-year guidance unchanged, given that elevated fuel costs could persist.

Morgan Stanley says Walmart is well-positioned to benefit from consumers trading down as inflation squeezes household budgets.

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The Inflation Angle

Rising prices have been a quiet tailwind for Walmart. As more Americans look for value, foot traffic and basket sizes have held up better at Walmart than at some higher-priced rivals.

This quarter comes as inflation and fuel costs remain elevated, in part due to the ongoing Iran war. Results from Walmart and other retailers this week may offer a clearer picture of how consumers are coping.

Walmart has raised its dividend for 31 consecutive years. The stock trades at a P/E ratio of 49.11, which InvestingPro flags as overvalued relative to its Fair Value estimate.

The company’s market cap currently sits at $1.07 trillion.

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