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Walmart (WMT) Gains But Lags Market: What You Should Know

Walmart (WMT) closed at $109.82 in the latest trading session, marking a +0.38% move from the prior day. This move lagged the S&P 500's daily gain of 6.24%. Elsewhere, the Dow gained 6.38%, while the tech-heavy Nasdaq added 5.6%.

Heading into today, shares of the world's largest retailer had lost 3.85% over the past month, outpacing the Retail-Wholesale sector's loss of 13.73% and the S&P 500's loss of 21.22% in that time.

Investors will be hoping for strength from WMT as it approaches its next earnings release, which is expected to be May 19, 2020. On that day, WMT is projected to report earnings of $1.15 per share, which would represent year-over-year growth of 1.77%. Our most recent consensus estimate is calling for quarterly revenue of $127.04 billion, up 2.52% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.12 per share and revenue of $539.80 billion, which would represent changes of +3.85% and +3.02%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for WMT. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.09% higher within the past month. WMT is currently a Zacks Rank #3 (Hold).

In terms of valuation, WMT is currently trading at a Forward P/E ratio of 21.36. This valuation marks a premium compared to its industry's average Forward P/E of 11.67.

It is also worth noting that WMT currently has a PEG ratio of 4.32. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Supermarkets stocks are, on average, holding a PEG ratio of 2.26 based on yesterday's closing prices.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 154, which puts it in the bottom 40% 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.

To follow WMT in the coming trading sessions, be sure to utilize Zacks.com.


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