Buy Walmart shares ahead of its earnings report Thursday, analyst says
The action winning streak (WMT) has slowed in recent weeks, but Gordon Haskett argues the retail giant is worth buying ahead of its earnings report on Thursday.
The comeback story. Walmart stock is up 14.5% year-to-date, just below the 15% gain seen by the S&P 500. Shares of the company have risen more than 17% in the past 12 months. last months, while the
SPDR S&P Retail ETF
(XRT) has fallen over the past year.
Walmart previous income report raised the shares, as investors began to see more evidence that the company’s strategy for boost online sales and gain market share in the grocery segment were gaining ground. Most analysts were optimistic about Walmart investment in technology and innovation, curbside pickup to its partnership with Affirm for installment loans. The company also increased its dividend and his somewhat defensive nature helped him weather concerns related to the trade war, even if tariffs remain a concern even for strong players in the industry.
What’s up. Walmart has not been immune to recent market downturns, with investors worried not only about the impact of the latest round of tariffs, but also about government proposals to potentially pull out of the nutritional assistance program. additional (SNAP). Yet Gordon Haskett’s analyst Chuck grom argues that even with these headwinds, Walmart “is among the best positioned to excel in today’s macro / geopolitical environment” because its size and scale allow it to shift price pressure, especially as competitors increase their prices to reflect new import duties (strengthening Walmart’s position as a low-price leader). He reiterated an Accumulate rating and a stock price target of $ 115 on Tuesday.
Look ahead. Grom is bullish on the company’s next earnings report and expects comparable sales at Walmart to remain relatively strong despite volatile trends elsewhere in retail. He also argues that the market has yet to fully appreciate the margin inflection seen in the company’s first quarter, and “another quarter of progress on this front will provide the necessary visibility into the company’s ability to drive profitability. earnings growth going forward. ” These better margins, as well as the current company strength in the grocery department “Should lead to a cycle of upward earnings revisions” from analysts through fiscal 2021, Grom said.
Walmart rose 2% to $ 107.25 in recent negotiations.
Write to Teresa Rivas at [email protected]