Walmart (NYSE:WMT) is well positioned for a first-quarter beat and raise, according to Citi analysts.
In a research note, previewing the retailer's earnings release next week, the analysts, who have a Buy rating and $169 price target on WMT, said their firm models first quarter sales in line with consensus/guidance and EPS slightly above.
"We model net sales +5.0% (and WMT US comps +4%) vs consensus of +5.2% and guidance of +4.5-5.0% cc. We are at $1.33 vs consensus of $1.30 and guidance of $1.25-1.30. Mgmt reiterated its 1Q and F23 guidance at its 4/4-4/5 investor event," the analysts wrote.
Furthermore, Citi believes the market "likely expects a modest beat and reiteration of F23 guidance (or slight upward revision)."
"Mgmt previously guided 2Q EBIT flat YoY, and we do not expect them to change this. This implies 2Q EPS of ~$1.65-1.70 vs consensus of $1.70. We believe mgmt will maintain its guidance for 2H and raise annual guidance by the amount of the 1Q beat ($0.03), implying revised guidance of $5.93-6.08 vs consensus of $6.11," the analysts added.
They also noted that Walmart web traffic data shows first quarter trends are not meaningfully different from the fourth quarter, while foot traffic data shows first quarter trends decelerating to -7.8% from -3.2% in 4Q22. However, the analysts also cautioned that the data does "not seem well correlated with WMT sales."