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

Walmart (WMT) closed at $131.21 in the latest trading session, marking a -0.02% move from the prior day. This change lagged the S&P 500's daily gain of 0.74%. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 1.67%.

Heading into today, shares of the world's largest retailer had gained 9.63% over the past month, outpacing the Retail-Wholesale sector's gain of 8.32% and the S&P 500's gain of 5.51% in that time.

Wall Street will be looking for positivity from WMT as it approaches its next earnings report date. This is expected to be August 18, 2020. The company is expected to report EPS of $1.22, down 3.94% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $133.97 billion, up 2.76% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.93 per share and revenue of $545.29 billion, which would represent changes of 0% and +4.07%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for WMT. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.06% lower 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 26.62. For comparison, its industry has an average Forward P/E of 19.38, which means WMT is trading at a premium to the group.

Investors should also note that WMT has a PEG ratio of 4.73 right now. 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. WMT's industry had an average PEG ratio of 2.54 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 96, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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