- Walmart reports its fourth-quarter earnings report Tuesday before the open.
- Wall Street expects adjusted earnings per share of $1.65.
- The analyst consensus forecasts profits of $169.26 billion.
- The market will focus on the possible acquisition of Vizio.
Walmart (WMT) earnings report presentations begin this week after Monday's President's Day holiday. The largest retailer releases its fourth-quarter results in Tuesday's premarket session and ahead of the release of Nvidia (NVDA) scheduled for Wednesday.
In addition to results and guidance, questions early Tuesday will most likely concern Walmart's rumored $2 billion purchase of Vizio, which company executives have remained silent about since The The Wall Street Journal reported on it last week.
Walmart Earnings News
Wall Street expects Walmart to post $1.65 in adjusted earnings per share (EPS) on record sales of $169.26 billion in the quarter ending in January. This would be an earnings increase of 4%, but a slight drop from the previous quarter, in which adjusted EPS was $1.71.
Walmart has a long history of beating the analyst consensus, and chances are 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 be the focus of its earnings report, which will take place at 8:00 ET on the morning of February 20. Walmart generated approximately $3.19 billion in advertising revenue in 2023, while forecasts suggest that figure will reach $4 billion in 2024.
Also on the minds of shareholders and analysts will be the impending stock split, which is typically bullish for the stock price. On February 26, Walmart plans to give shareholders three shares for each one they currently own. Based on the current price, this would mean a stake value of around $57.
Frequently asked questions about the S&P 500
What is the S&P 500?
The S&P 500 is a widely followed stock index that measures the performance of 500 public companies and is considered a broad measure of the U.S. stock market. The influence of each company in the calculation of the index is weighted based on market capitalization. This is calculated by multiplying the number of listed shares of the company by the share price. The S&P 500 Index has achieved impressive returns: $1.00 invested in 1970 would have produced a return of almost $192.00 in 2022. The average annual return since its inception in 1957 has been 11.9%.
How are companies chosen to be included in the S&P 500?
Companies are selected by committee, unlike other indices where they are included based on established standards. Still, they must meet certain eligibility criteria, the most important of which is market capitalization, which must be equal to or greater than $12.7 billion. Other criteria are liquidity, domicile, market capitalization, sector, financial viability, listing time, and representation of the sectors of the United States economy. The nine largest companies in the index represent 27.8% of the index's market capitalization.
How can I trade the S&P 500?
There are several ways to trade the S&P 500. Most retail brokers and spread betting platforms allow traders to use Contracts for Difference (CFDs) to place bets on price direction. In addition, you can buy index funds, mutual funds and exchange-traded funds (ETFs) that track the price of the S&P 500. The most liquid of the ETFs is the London Stock Exchange ETF. The most liquid of the ETFs is State Street Corporation's SPY. The Chicago Mercantile Exchange (CME) offers futures contracts on the index and the Chicago Board of Options (CMOE) offers options, as well as ETFs, inverse ETFs, and leveraged ETFs.
What factors drive the S&P 500?
There are many factors that drive the S&P 500, but primarily it is the aggregate performance of its component companies, revealed in their quarterly and annual earnings reports. US and global macroeconomic data also contribute, influencing investor sentiment, which if positive, drives earnings. 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 companies largely depend. Therefore, inflation can be a determining factor, as well as other parameters that influence the decisions of the Federal Reserve.
Forecast on Walmart
Walmart shares are up 7% so far this year and are trading at an all-time high. WMT stock has formed a cup along the mid-November range high and closed last Friday slightly above that level.
Currently, Walmart stock is trading slightly above its five-year average on a forward P/E ratio. The Price/Sales ratio also shows a slight premium today compared to the five-year average.
Walmart stock remains in an uptrend since June 2022. With the weekly MACD indicator showing a bullish crossover, WMT stock appears likely to make a new all-time high on Tuesday.
WMT Weekly Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
