by winston » Fri Apr 20, 2018 1:36 pm
vested
Stocks That Will Report Earnings Fails: Walmart (WMT)
One of the biggest winners in 2017 was Walmart Inc (NYSE:WMT). WMT stock rose more than 40% and had its best year in nearly two decades as the company accelerated its digital commerce growth narrative.
But WMT stock has also been one of the biggest losers in 2018. It is down 10% year-to-date and 20% off its late January highs.
This shouldn’t come as any surprise. After all, the company’s biggest competitor, Target Corporation (NYSE:TGT), hasn’t gone anywhere. After getting its butt kicked by Walmart for most of 2016 and 2017, Target is finally starting to fight back.
This is normal. Walmart and Target have been locked in competition for several decades. Walmart beats Target for a period of time. Then Target comes roaring back and beats Walmart for a period of time.
Right now, we are just starting the era where Target beats Walmart. For the first time in several quarters, Target posted better comparable sales growth, better traffic growth and better digital sales growth than Walmart last quarter.
Considering these periods of operational out-performance usually last for several quarters, it looks like Target will be besting Walmart for the next several quarters. That doesn’t bode well for WMT stock, which currently trades at an over-extended valuation (18-times forward earnings versus 5-year average of 16-times).
Consequently, considering Target is on the up and Walmart is on the down, this earnings season might not yield the best results for WMT stock.
Source: Investor Place
It's all about "how much you made when you were right" & "how little you lost when you were wrong"