This adjustment comes in response to Walmart's mixed performance in Q3 2024, with comp growth surpassing expectations but EBIT falling short. Astrachan, while slightly raising their EPS projections for FY 2024 to 2026, maintains an unchanged view that the long-term EBIT growth forecast will outpace revenue.
Walmart's Q3 2024 results revealed an EPS of $1.53, aligning with the Zacks Consensus Estimate and beating Q3 2023's $1.50 by 2%. The company's revenue of $160.8 billion also exceeded the Zacks Consensus Estimate of $159.5 billion and represented a 5.2% increase compared to Q3 2023's $152.81 billion. Additionally, net sales experienced a 5.3% year-over-year growth, reaching $159.44 billion, while operating income surged by 130% to $6.20 billion.
Looking ahead, Walmart management has provided guidance for FY 2024, which includes an EPS range of $6.40 to $6.48, net sales growth of 5% to 5.5%, and operating income growth of 7% to 7.5%. President and CEO Doug McMillon expressed optimism about the company's performance, highlighting strong revenue growth across segments and their readiness for the holiday season.
In addition to Stifel Nicolaus, other analysts have also revised their ratings and price targets for Walmart. Scot Ciccarelli from Truist Securities raised their price target by 1.2% to $170, maintaining a Hold rating. Simeon Gutman of Morgan Stanley lowered their price target by 1.2% to $168, while maintaining a Strong Buy rating. Greg Melich from Evercore ISI Group lowered their price target by 5.3% to $177, also maintaining a Buy rating.
As of now, 84.2% of top-rated analysts view Walmart as a Strong Buy or Buy, with 15.8% rating it as a Hold. No analysts recommend or strongly recommend selling the stock.
The consensus forecast among analysts predicts that Walmart's upcoming year will yield earnings per share (EPS) of $5.93, indicating a 14% increase compared to the previous year.
Despite a 5.1% year-over-year increase, Walmart's stock performance has trailed behind the S&P 500, which has shown a 14% growth during the same period.
It is worth noting that Stifel Nicolaus analyst Mark Astrachan ranks in the top 4% of Wall Street analysts according to WallStreetZen. With an average return of 19.2% and a 72.3% win rate, Astrachan specializes in the Consumer Cyclical, Consumer Defensive, and Basic Materials sectors.
Walmart Incorporated operates various retail, wholesale, and other units in the U.S. and internationally through its three segments: Walmart U.S., Walmart International, and Sam's Club. The company operates a wide range of stores, including supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, discount stores, membership-only warehouse clubs, and e-commerce websites. Established in 1945, Walmart is headquartered in Bentonville, Arkansas.
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