- Walmart plans to release next quarterly results on Thursday
- In yesterday’s trading, the company broke towards new historic highs
- Walmart stock looks like a promising investment for long-term investors, but wait for a correction before buying
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This week, Wall Street is buzzing with expectations surrounding the retail sector’s earnings report. Investors are keen to determine whether consumers maintain strong purchasing patterns despite tough economic conditions.
Several major companies in the industry are scheduled to release their financial results, including Home Depot (NYSE: HD) today and Target (NYSE: TGT) tomorrow, but Walmart (NYSE: WMT) has been attracting particular attention. An announcement will be made after the bell Thursday afternoon. . The retail giant hit a historic high in yesterday’s trading, signaling strong expectations from investors and the possibility of a sustained upward trend.
Looking at the bigger picture, the market is riding a wave of optimism. The Nasdaq 100 index has surged 8% over the past 10 days, outpacing the S&P 500 index, which has posted a modest increase of less than 5%.
If you’re looking to make a long-term investment in the current economic climate, Walmart may be a great option.
It has stable, regular dividends and exposure to a resilient food sector that tends to hold up even in economic slowdowns and recessions.
Source: InvestingPro
The upcoming holiday season is crucial for the retail industry/h2
The upcoming holiday season is of paramount importance for the retail industry, marked by increased sales and the need for strategic stockpiling, especially in the run-up to Christmas.
But the risk of overstocking is imminent given projections for a modest 3% to 4% year-over-year increase in U.S. consumer spending.
Despite these challenges, Walmart has established itself as a leader in the food-focused retail industry and benefits from favorable macroeconomic conditions. This positive attitude is reflected in the company’s stock price trend.
Encouragingly, the e-commerce sector brought some very positive news, posting an impressive 24% year-on-year increase in the first two quarters.
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This growth is especially noticeable in the post-pandemic period, when many companies are experiencing a natural decline in this sector.
The surge in e-commerce can be attributed to consumers actively seeking out competitively priced offers, especially on groceries and household items. This trend is gaining importance as inflation rises and affects household budgets.
Walmart’s profits have regularly exceeded expectations in the past./h2
Thursday’s market benchmark is expected to post earnings of $1.52 a share and revenue of $158.5 billion.
Source: InvestingPro
Comparing actual and forecast results over the past eight quarters, we’ve only seen the measure fall below consensus once, which is certainly an impressive statistic.
Source: InvestingPro
It is important to note that a surge in e-commerce success does not always translate into an immediate increase in stock prices during a trading session.
However, several other factors come into play, especially the forecast for future quarters related to net income and sales.
Walmart Stock Technical View: Jump on the Bandwagon and Wait for a Correction/h2
While a break to a new historic high is definitely a strong signal for a continuation of the uptrend, it may not be the best time to enter a position from a technical perspective, given the risk of buying at higher levels.
Therefore, a potential pullback could be a great opportunity to join the ongoing trend at a more favorable price.
Immediate support levels lie in the $166 to $164 per share price range, indicating that the potential correction may not extend too far.
This trend toward a shallow correction is further supported by the fair value index, which currently indicates a target level of around $165 per share.
It is important to note that we are discussing region-specific discounts and the prospects for further increases remain positive in the medium to long term.
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Disclosure: The author has no position in any securities mentioned in this report.
Written by:
Investing.com