On Thursday, Walmart Inc. (NYSE:WMT) shares received continued support from a major financial institution as Citi reiterated its Buy rating, maintaining a $75.00 price target for the retail giant's shares. The endorsement follows Walmart's recent financial report, which exceeded market expectations in several key areas.
Walmart's performance showcased a robust 4.2% increase in U.S. comparable sales, surpassing both the consensus estimate of 3.7% and the anticipated 3.0% figure. Additionally, the company's U.S. gross margin expanded by 50 basis points, a significant achievement considering the ongoing shifts in product category mix. Emerging sectors such as advertising have been credited with bolstering gross margins.
In light of the stronger-than-expected sales, especially towards the latter part of July, Walmart's management has confidently revised its fiscal 2024 guidance upwards. The new forecast now stands at $2.35 to $2.43 per share, an increase from the previous range of $2.23 to $2.37 and above the consensus of $2.37. This adjustment includes some of the $0.08 per share beat from the first quarter.
Despite the third-quarter earnings per share guidance of $0.51 to $0.52 falling below the consensus estimate of $0.55, Citi suggests that this figure may be on the conservative side. The combination of a sales and gross margin beat, coupled with the raised guidance for fiscal 2024, is expected to positively influence Walmart's stock value.
In other recent news, Walmart Inc. has been making significant strides in its financial performance and board composition. The retail giant recently reported a U.S. comparable sales growth of 4.2%, surpassing the anticipated 3.4%, largely driven by e-commerce and increased customer transactions. Walmart's EBIT for the quarter stood at $7.9 billion, slightly above the consensus estimate of $7.8 billion. The company has also revised its sales, EBIT, and EPS growth forecasts for the full year upward.
In terms of board changes, Bob Moritz, retired Chairperson of PricewaterhouseCoopers, has joined Walmart's Board of Directors. Moritz is set to serve on both the Audit Committee and the Technology and eCommerce Committee, bringing his extensive experience in financial services and international business leadership.
Financial services firm, DA Davidson, maintained a positive outlook on Walmart, reasserting a Buy rating with a price target of $75.00, while Stifel maintained a Hold rating. CFRA also raised its price target for Walmart to $75 based on a strong sales outlook.
Recent developments also include Walmart's strategic adjustments to its holiday promotions in light of potential labor strikes and ongoing shipping disruptions. The company, like many others, is also reducing jobs at its headquarters amid economic uncertainty. These are recent developments reflecting a broader trend of strategic planning and restructuring as companies prepare for potential economic challenges ahead.
InvestingPro Insights
Walmart Inc. (NYSE:WMT) continues to demonstrate financial resilience and market appeal, as reflected in the latest data and analysis. According to InvestingPro, Walmart's market capitalization stands at a robust $552.27 billion, underscoring its significant presence in the retail industry.
The company's Price/Earnings (P/E) ratio is currently at 29.18, which, when adjusted for the last twelve months as of Q1 2023, is 29.71. This indicates that Walmart is trading at a low P/E ratio relative to its near-term earnings growth, an InvestingPro Tip that suggests potential value for investors considering the stock's growth prospects.
Furthermore, with a Revenue Growth of 5.68% over the last twelve months as of Q1 2023, Walmart shows a steady increase in its top-line earnings. This growth is complimented by a solid Gross Profit Margin of 24.5%, reflecting efficient operations and a strong hold on its cost of goods sold. Another InvestingPro Tip highlights Walmart's low price volatility, offering a sense of stability for investors in an often turbulent market.
For those interested in dividend returns, Walmart has not only maintained but also increased its dividend payments for 52 consecutive years, with a recent dividend yield of 1.21% and a growth of 9.21% in the last twelve months as of Q1 2023. For more detailed analysis and additional InvestingPro Tips, investors can explore the full suite of insights available on the InvestingPro platform, which includes a total of 10 tips for Walmart Inc.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.