Walmart stock price jumped earlier this week after the retailer reported excellent quarterly results. The increase helped the stock recover some of the enormous losses it sustained in May after the company reported a dismal first quarter.
Is Walmart stock a buy now that inflationary pressures seem to have subsided?
Walmart Stock: Second-Quarter Results and the Market
The store based in Arkansas reported solid second-quarter results earlier this week. Both earnings and sales for the company were better than expected.
Walmart (NYSE:WMT) reported non-GAAP EPS of $1.77 for the second quarter, which was $0.17 higher than analysts had predicted. The company’s revenue of $152.6B was up 8% from the previous year and $2.64B higher than expected.
In addition, comparable year-over-year sales in the United States increased by 6.5% in the second quarter and by 11.7% when compared to the second quarter of 2016. Meanwhile, the annual increase in online sales was 16%, and growth over two years was 32%. And in the grocery industry, Walmart kept eating up more and more of the competition.
Morgan Stanley noted in light of the findings that Walmart appeared to show that inventory and markdown concerns were under control. The investment bank added that it expects shorter-term gains to outweigh losses.
John Hancock countered that Walmart (NYSE:WMT) and other corporations benefited from revenue gains backed by inflation.
Walmart stock experienced a severe setback in May when the company’s price dropped 11% in a single trading session after reporting poor earnings for the first quarter. Due to the impact of inflation on margins, the company fell short of forecasts and revised its outlook downward.
Shares dropped to a 52-week low of $117.27 after the announcement. Since then, the stock price has fluctuated up and down over the past three months from that point. The stock has closed higher for the past 16 sessions in a row.
Walmart (NYSE:WMT) is trading close to $137, up roughly 17% from its 52-week low of $108. With this 5% drop, shares are expected to close in 2022 around 5% down.
Compared to its competitors, Walmart (NYSE:WMT) has performed better than most, even though it is currently in the red for the year. Shares of retailers like Target (NYSE:TGT) and Home Depot (NYSE:HD) have dropped by almost 20% this year alone. Meanwhile, Costco Wholesale (NASDAQ:COST) has held up even better, falling by only roughly 2% so far this year.
Should You Buy Walmart Stock?
Twenty of the 39 analysts polled by Thomson Reuters within the last 90 days recommended Walmart (NYSE:WMT) as a Strong Buy. A further 7 research firms recommend buying Walmart stock. A further 12 experts all agree that WMT is a Hold.
However, the average price goal among analysts is $150.93 a share. WMT has a high price goal of $170 per share and a low price target of $130 per share.
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Author Shariq Khan 