Retail

Will Walmart Outdo Amazon When It Reports Thursday Morning?

Chris Lange

Published: November 13, 2019 12:25 pm

Last Updated: January 30, 2020 1:13 pm

Walmart Inc. (NYSE: WMT) is scheduled to release its fiscal third-quarter financial results before the markets open on Thursday. The consensus estimates are calling for $1.09 in earnings per share (EPS) and $128.64 billion in revenue. The same period of last year reportedly had $1.08 in EPS and $124.89 billion in revenue.

Analysts often like to draw a dichotomy between Walmart and Amazon.com Inc. (NASDAQ: AMZN) as two of the biggest players in this consumer economy. While Amazon recently posted poor earnings and lost out on a major cloud deal with the U.S. Department of Defense, Walmart slowly but surely has hoisted its way into a major position in retail e-commerce.

Walmart’s growth is snail-like compared to Amazon’s. Its revenue in the most recent quarter rose 2.9% to $131.7 billion. This may be modest, but it once again cements its position as the world’s largest retailer, and one that can grow despite its size. In its home market, it has done particularly well. When management announced numbers, it said: “Walmart U.S. comp sales increased on a two-year stacked basis by 7.3%, which is the strongest growth in more than 10 years.”

Walmart also has started to flank Amazon in some of its most important businesses. Amazon’s move into groceries via its purchase of Whole Foods was meant to challenge Walmart. However, Walmart has grown its grocery pick-up business to 2,700 locations. Its in-home grocery business delivers fresh food to people’s homes. It has a next-day delivery operation to challenge Amazon’s.

With Amazon having such a bad quarter recently, it may be time for Walmart to shine.

Excluding Wednesday’s move, Walmart had outperformed the broad markets, with the stock up 28% year to date. In the past 52 weeks, the stock was up closer to 13%.

A few analysts weighed in on Walmart ahead of the report:

• Nomura has a Buy rating with a $132 price target.
• JPMorgan has a Neutral rating with a $130 price target.
• Oppenheimer rates it at Market Perform with a $125 target.
• Baird has an Outperform rating with a $130 target price.
• Citigroup’s Buy rating comes with a $135 target price.
• Morgan Stanley rates it Overweight with a $125 price target.

Shares of Walmart traded up about 0.5% at $119.75 midday Wednesday, in a 52-week range of $85.78 to $120.92. The consensus price target is $123.58.