Walmart Earnings: WMT stock rises on terrific online, advertising growth

Walmart delivered Q4 earnings on Tuesday before the open.
Wall Street expected $1.65 in adjusted EPS, which the retailer beat by 15 cents.
Analyst consensus called for $169.26 billion in revenue, which was topped by over $4 billion.
The Vizio acquisition was announced at $2.3 billion.

UPDATE: Walmart indeed bested the Wall Street earnings consensus early Tuesday. The leading retailer in the US announced adjusted EPS of $1.80, 15 cents ahead of the consensus forecast for the fourth quarter. Revenue arrived at $173.4 billion, more than $4 billion ahead of the projected top line. Global digital sales grew 23% from a year ago, while the retail advertising unit saw 33% YoY growth. WMT stock jumped 5.6% at the start of Tuesday's regular session, hitting an all-time high above $180 per share. Management said it would pay $2.3 billion for Vizio's connected TV business.

Walmart (WMT) kicks off earnings this week following the Presidents’ Day market holiday on Monday. The largest retailer releases its results for the fourth quarter in Tuesday’s premarket and ahead of Nvidia's (NVDA) release scheduled for Wednesday.

Besides results and guidance, questions early Tuesday will most likely involve Walmart’s rumored buyout of Vizio for $2 billion, which company executives have remained mum on since The Wall Street Journal reported it last week.

Walmart stock earnings news

Wall Street expects Walmart to earn $1.65 in adjusted earnings per share (EPS) on a record $169.26 billion in sales for the quarter ending in January. This would amount to a 4% increase in revenue but a slight dip from the year prior’s quarter of $1.71 in adjusted EPS.

Walmart has a long track record of beating analyst consensus, and the odds are that it will do so this time as well. JPMorgan said in a recent note that with more than two-thirds of S&P 500 companies having already reported this cycle, 78% of companies have beaten earnings consensus, while 57% have beaten revenue consensus.

Walmart’s advertising business will also get special attention at the earnings call, which comes at 8:00am on February 20. Walmart brought in approximately $3.19 billion in advertising revenue in 2023, while forecasts call for that number to hit $4 billion in 2024.

Also on shareholder and analyst minds will be the impending stock split, which is typically bullish for stocks. On February 26, Walmart plans to hand shareholders three shares for every one currently owned. Based on the current price, this would mean a share value somewhere around $57.

S&P 500 FAQs

What is the S&P 500?

The S&P 500 is a widely followed stock price index which measures the performance of 500 publicly owned companies, and is seen as a broad measure of the US stock market. Each company’s influence on the computation of the index is weighted based on market capitalization. This is calculated by multiplying the number of publicly traded shares of the company by the share price. The S&P 500 index has achieved impressive returns – $1.00 invested in 1970 would have yielded a return of almost $192.00 in 2022. The average annual return since its inception in 1957 has been 11.9%.

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Companies are selected by committee, unlike some other indexes where they are included based on set rules. Still, they must meet certain eligibility criteria, the most important of which is market capitalization, which must be greater than or equal to $12.7 billion. Other criteria include liquidity, domicile, public float, sector, financial viability, length of time publicly traded, and representation of the industries in the economy of the United States. The nine largest companies in the index account for 27.8% of the market capitalization of the index.

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Many different factors drive the S&P 500 but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual company earnings reports. US and global macroeconomic data also contributes as it impacts on investor sentiment, which if positive drives gains. The level of interest rates, set by the Federal Reserve (Fed), also influences the S&P 500 as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

Walmart stock forecast

Walmart stock is up 7% year-to-date and is trading at its all-time high. WMT stock has formed a cup with the range high from mid-November and closed last Friday just a little bit higher.

Walmart stock currently trades slightly above its five-year average on a forward P/E ratio. The Prices/Sales ratio also shows a slight premium at present compared with the five-year average.

Walmart stock has remained in an uptrend since June of 2022. With the weekly chart’s Moving Average Convergence Divergence (MACD) indicator displaying a bullish crossover, WMT stock appears likely to make a new all-time high on Tuesday.

WMT weekly stock chart

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