Wal-Mart Stores Inc. (WMT) reported its fourth-quarter and fiscal 2017 results early on Tuesday. The discount giant saw its shares make a handy gain that day and close out the week up about 4.5%. Analysts took this as an opportunity to hike their targets on the stock, but one report out of the group stood out from the rest, calling almost a street-high target. Some might even call it a “Screaming Buy” at a time when the broad markets are screaming higher.
24/7 Wall St. has included some of the highlights from the earnings report, as well as what some analysts are saying afterward.
For the quarter, Wal-Mart posted $1.30 in earnings per share (EPS) on revenues of $130.9 billion, including membership fees in Sam’s Club. The consensus estimates from Thomson Reuters had called for EPS of $1.29 and $131.22 billion in revenue. In the same period of last year, the company posted EPS of $1.49 on revenues of $129.67 billion.
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U.S. fourth-quarter same-store sales rose 1.8% at the company’s supercenter and discount stores. Same-store sales in the company’s Sam’s Club stores were up 2.4% excluding fuel and up 3.1% including fuel sales. Total U.S. net sales, including fuel, rose 2% for the quarter.
Wal-Mart guided fiscal year 2018 EPS in a range of $4.20 to $4.40 and first-quarter EPS at $0.90 to $1.00. Consensus estimates call for first-quarter EPS of $0.96 and revenues of $117.81 billion. For the 2018 fiscal year, analysts are looking for EPS of $4.33 and sales of $494.68 billion.
Before we get to the report in question, a few other analysts weighed in on Wal-Mart:
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Goldman Sachs has a Neutral rating with a $74 price target.
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RBC Capital Markets has an Underperform rating with a $67 price target.
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Cowen reiterated an Outperform rating.
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Stifel has a Hold rating with a $72 price target.
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Wells Fargo has a Hold rating.
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Bernstein has a Neutral rating and a $75 price target.
Merrill Lynch stood out from this group when it raised Wal-Mart to a Buy rating from Neutral, and the price objective was raised to $88 from $76. This new price target is just $2.00 shy of the highest price target in the Thomson Reuters universe. The consensus price target is now $74.87, but that target has been somewhat flat for about four months now.
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The firm believes that the U.S. comp and e-commerce sales momentum should continue in fiscal 2018, and also that Wal-Mart is entering a period of sustained 20% to 30% or so e-commerce growth driven by acquisitions, marketplace and grocery pickup.