Walmart, the world’s largest retailer, is set to report its fiscal first-quarter results on May 16. Analysts expect the company to fall short of revenue and earnings expectations, potentially leading to a dip in WMT stock. Walmart currently holds $46.9 billion in debt and $9.9 billion in cash, with higher financing rates posing a long-term risk for the retailer. Despite slowing U.S. comparable sales growth over the last fiscal year, Walmart anticipates a 3-4% revenue growth for FY 2025, with full-year EPS projected at $2.23 to $2.37 on a post-split basis.
Although WMT stock has shown gains over the past three years, it has not been consistent. Returns for the stock were 2% in 2021, 0% in 2022, and 13% in 2023, underperforming the S&P 500 in 2021 and 2023. Beating the S&P has been challenging for individual stocks recently, including heavyweights in the Consumer Staples sector and megacap tech companies. The Trefis High Quality Portfolio, comprising 30 stocks, has consistently outperformed the S&P 500 each year, providing better returns with less risk. With the current macroeconomic uncertainties, including high oil prices and elevated interest rates, it remains to be seen if Walmart will underperform the S&P over the next 12 months or see a significant increase in stock value.
Trefis estimates Walmart’s Q1 2025 revenues to be around $156.1 billion, slightly below consensus estimates. In Q4, the company reported a 5.7% y-o-y increase in revenue to $174.4 billion, with e-commerce sales rising by 23% y-o-y. Walmart’s global advertising business also saw significant growth during the quarter. The company forecasts revenue of $673.7 billion for fiscal 2025, a 4% increase compared to the previous year. The retailer’s earnings per share for Q1 2025 are expected to be $0.50 per Trefis analysis, slightly missing consensus estimates, with an adjusted EPS of $1.80, up 5% y-o-y due to growth in operating income.
Walmart’s stock price estimate is lower than the current market price, with a valuation suggesting a price of $54 per share, almost 11% lower than its current value. The company’s EPS estimate for fiscal 2025 is around $2.32, with a P/E multiple of 23.4x. This may indicate a potential decrease in stock value in the near future. It is essential to compare Walmart’s performance with its peers to gain better insights into its market standing. Investors can look at how Walmart’s stock compares to its peers on various metrics to make informed investment decisions. Overall, Walmart’s upcoming earnings report will be closely monitored for any indication of the company’s future performance and potential challenges.
