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Walmart (WMT) Stock Sinks As Market Gains: What You Should Know

Walmart (WMT) closed at $143.54 in the latest trading session, marking a -1.53% move from the prior day. This move lagged the S&P 500's daily gain of 1.17%. At the same time, the Dow added 2.95%, and the tech-heavy Nasdaq lost 1.53%.

Coming into today, shares of the world's largest retailer had gained 3.12% in the past month. In that same time, the Retail-Wholesale sector gained 5.08%, while the S&P 500 gained 4.58%.

Investors will be hoping for strength from WMT as it approaches its next earnings release, which is expected to be November 17, 2020. In that report, analysts expect WMT to post earnings of $1.18 per share. This would mark year-over-year growth of 1.72%. Meanwhile, our latest consensus estimate is calling for revenue of $131.79 billion, up 2.97% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.35 per share and revenue of $551.18 billion. These totals would mark changes of +8.52% and +5.19%, respectively, from last year.

Any recent changes to analyst estimates for WMT should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. WMT is currently a Zacks Rank #3 (Hold).

Investors should also note WMT's current valuation metrics, including its Forward P/E ratio of 27.26. For comparison, its industry has an average Forward P/E of 15.7, which means WMT is trading at a premium to the group.

We can also see that WMT currently has a PEG ratio of 4.96. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Supermarkets industry currently had an average PEG ratio of 2.56 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 85, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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