Lower Expectations for Walmart's 2Q Make for a Better Set Up

Dow Jones
08/17

1151 ET - Indicators have been mixed heading into Walmart's 2Q earnings report, scheduled for Thursday, Davidson analysts say in a research note. They cite point-of-sale data that shows a deceleration from last quarter, coupled with overall retail sales for general merchandise stores showing an acceleration to the highest growth rate in more than three years. "We are looking for another quarter of comps in the low 4% range," the analysts say, noting their forecast is slightly ahead of Wall Street models. Walmart's stock has underperformed to date, they add, citing concerns of slowing comps against a premium multiple. "We think this lowers the bar in front of the 2Q print and makes for an attractive set up," they write.

 

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