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Walmart (WMT) is scheduled to report results of its first quarter before the market open on Thursday, May 16, with a conference call scheduled for 8:00 am EDT. What to watch for:
GUIDANCE: In February, Walmart forecast fiscal 2025 adjusted earnings per share of $6.70-$7.12 on revenue of up 3%-4% vs. fiscal 2024. Walmart also forecast Q1 adjusted EPS $1.48-$1.56 on revenue up 4%-5%. The Fly notes that on January 30, Walmart announced a 3-for-1 stock split, part of its ongoing review of optimal trading and spread levels and its desire for its associates to feel that purchasing shares is easily within reach. Trading in the company’s common stock on a post-split basis began on February 26.
UBS thinks the quarter will “check the boxes” and show that Walmart’s investment case stands out, that the company will show that the retailer continues to gain share, domestically and abroad, and that the stock has room to run.
VIZIO ACQUISITION: Also in February, Walmart announced an agreement to acquire Vizio (VZIO) for $11.50 per share in cash, or a fully diluted equity value of approximately $2.3B. Walmart said it expected the transaction to be slightly dilutive to EPS in the near-term and that to finance the acquisition, Walmart planned to use cash and/or debt.
Walmart and Vizio received a request for addition information from the FTC in late April. “The issuance of the Second Request extends the waiting period under the HSR Act until 30 days after both VIZIO and Walmart have substantially complied with the Second Request, unless the waiting period is terminated earlier by the FTC or extended by agreement of VIZIO and Walmart. VIZIO and Walmart expect to promptly respond to the Second Request and to continue working cooperatively with the FTC as it conducts their review of the Merger,” according to a reglatory filing.
CLOSING WALMART HEALTH, VIRTUAL CARE: Walmart announced on April 30 that it will close all of its 51 health centers across five states and shut down the virtual care offering. “Through our experience managing Walmart Health centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue,” Walmart said. ” We do not yet have a specific date for when each center will close but will share as soon as decisions are made. While we will no longer operate health centers, we will take what we learned as we provide trusted health and wellness services across the country through our nearly 4,600 Pharmacies and more than 3,000 Vision Centers.”
Walmart is cutting hundreds of corporate jobs and asking most remote workers to move to its officers, Sarah Nassauer of The Wall Street Journal reported on May 14, citing people familiar with the matter. Further, workers in small offices like Dallas, Atlanta, and Toronto are being asked to move to other central hubs, the Journal’s sources added. Walmart will continue to allow staff to work remotely part-time if they are in the office the majority of the time.
‘TACTICAL OUTPERFORM’: Evercore ISI this week added Walmart to the firm’s “Tactical Outperform” list. The firm sees Q1 comp growth of 3.6% and EPS of 53c as “attainable with potential for upside,” said the analyst, who believes the company is executing at a high level and noted that the firm raised its Walmart comp and earnings outlook last week. The firm, which sees “near term upside to the mid-to-high $60’s and an upwards bias to consensus expectations,” has an Outperform rating and $66 price target on Walmart shares.
Meanwhile, DA Davidson added Walmart to the firm’s “Best-of-Breed Bison” list, which includes “best in class companies with sustainable moats and favorable risk/reward dynamics.” Walmart trades at a discount to its intrinsic value, which is $70 per share using a discounted cash flow model, the analyst said. Davidson said the company also stands out due to its favorable market dynamics, dominant market position, and shareholder oriented management.More By This Author:What Wall Street Experts Are Saying About Alibaba Ahead Of Earnings
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