Retail Giants Prepare for Earnings Reports Amid Market Momentum

Retail Earnings Loom: Can Walmart's Momentum Continue? Walmart's impressive performance this year may set the tone for the retail sector as it prepares to report quarterly results, leading to potential stock price shifts across competitors like Target and Amazon.

Date: 19-02-2025

AI Rating: 7

**Earnings Overview**: Walmart is set to report $0.64 in EPS on $179.3 billion in revenues, showing a year-over-year increase of +6.7% in EPS and +3.4% in revenues. The earnings surprises trend is particularly relevant as Walmart has consistently outperformed expectations in recent quarters.

**Comparison**: Relative to peers, Walmart significantly outperformed Target which saw a decline of -12.5% in its stock price over the year, while Walmart's stock was up +84.9%. This indicates stronger demand for Walmart's staple goods compared to Target's discretionary merchandise, which has suffered due to changing consumer focuses. Additionally, compared to Amazon's stock increase of +34.8%, Walmart remains the frontrunner.

**Market Positioning**: Walmart's success lies in its broader range of grocery items that remain in demand despite economic pressures, a stark contrast to Target's discretionary categories. This positioning affords Walmart greater resilience in times of economic uncertainty.

**Impact on Stock Prices**: Walmart's earnings report will be critical in determining the health of the retail sector, as it may influence investor perceptions and stock prices across major retailers. A positive report could bolster confidence in Walmart's strategy and stabilize the sector, while a negative outcome may spur declines similar to those seen in Target's performance.

**EPS and Revenue Beating Trends**: The overall retail sector has seen a +47.1% year-over-year increase in total Q4 earnings from the 17 reported companies, indicating a strong overall performance that could support further optimism in Walmart's results. However, the Q4 EPS beats percentage of 64.7% hints at possible margin pressures across the sector, which might warrant careful investor scrutiny.

Stocks: WMT TGT AMZN