Walmart $WMT Q3 Earnings Forecast: Key Strategies, Analyst Ratings, and Red Flags

Walmart is set to release earnings on November 19, and as one of the biggest names in retail, it’s always a good one to watch. Known for low prices, tons of locations, and a strong e-commerce presence, Walmart is a huge player in the space. So, let’s dig into what I’m watching to see if they’re ready to beat expectations.

What Are Walmart’s Earnings Expectations for Q3 2024?

For this quarter, analysts are expecting:

• Earnings per Share (EPS): $0.53
• Revenue: Around $160 billion

These are solid targets, but Walmart has some momentum behind it. Management recently raised its full-year forecast, so they’re definitely feeling optimistic about hitting these numbers. To me, that’s a good signal of confidence in their approach.

Is Walmart a Buy According to Analysts?

Analyst sentiment is pretty positive here. Almost all analysts are calling Walmart a “Buy,” with only one rating it as “Hold.” This broad support tells me there’s a lot of confidence that Walmart will come through this quarter. A high level of analyst backing is always a good sign for a stock.

Why Did Walmart’s Management Raise Its Forecast?

Last quarter, Walmart raised its full-year forecast, which isn’t something companies do unless they see stable growth or maybe even an upcoming boost in performance. It’s a good indicator that Walmart’s leadership feels confident about what’s ahead. They’re investing in growth through e-commerce and some new in-store initiatives, so it makes sense they’d want to set expectations accordingly.

Walmart’s Insider Selling – Should We Be Concerned?

Something interesting: over the past two years, insiders sold about $10 billion worth of Walmart stock without major insider buying. Now, insider selling isn’t always a warning sign – people sell for all kinds of reasons. But when it’s this high, it’s worth noting. Big sales from insiders could mean they’re cautious, so I’m keeping an eye on it.

Key Moves Walmart Has Made to Boost Earnings

Walmart isn’t just relying on its reputation to drive earnings. Here’s what they’ve done recently that could make a difference this quarter:

1. Early Black Friday Sales: Walmart got an early start on holiday sales this year, which should give them an edge by capturing more revenue earlier in the season.

2. Bettergoods Premium Brand: They launched “Bettergoods,” a new line of premium food items. This move targets a slightly different audience, one that might usually shop at places like Whole Foods or Trader Joe’s.

3. Omnichannel Partnerships: Walmart has been expanding its reach by partnering with platforms like TikTok, Roku, and Snapchat. It’s part of their push to blend online and in-store experiences, especially to attract younger customers who shop digitally.

How Are Walmart’s Peers Performing?

Walmart’s peers are also showing resilience in the current environment, which is a good sign for the whole retail sector:

• Costco: Reported a 6.6% revenue increase and raised its growth forecast to 4%.
• Home Depot: Saw a similar 6.6% increase in revenue, with demand from a strong customer base.
• Target: Although comparable sales dipped a bit, they still beat expectations and raised their forecast.

This kind of performance among its top competitors suggests Walmart might be able to post solid results as well. Retail’s holding up well, especially with these big names leading the way.

Potential Challenges for Walmart

While Walmart has a lot going for it, here are a few potential challenges:

• Inflation: Rising costs could put pressure on profit margins if they aren’t managed well.
• Supply Chain Issues: Disruptions are still affecting global supply chains, and that could impact inventory and sales.
• Competition: With companies like Amazon and Target always innovating, Walmart needs to keep adapting to stay competitive.

Will Walmart Beat Earnings in November?

Between positive analyst sentiment, strong management guidance, and some solid recent moves, I think Walmart has a good chance of meeting or even beating expectations. They’ve got momentum from strategic initiatives and are clearly focused on staying competitive.

Is Walmart a Buy?

For me, Walmart’s a steady choice if you’re looking for stability in retail. It’s not necessarily “undervalued” or high-growth, but it’s reliable. If you’re in it for the long haul, Walmart’s strong foundation in the sector makes it a solid buy. I’m betting on Walmart this quarter – not expecting huge jumps, but it’s a reliable pick in an unpredictable sector.

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