How to Trade Walmart Stock After Q1 Performance
The big retailers in the US – Walmart, Home Depot and Target – can give a huge amount of insight into the health of the American consumer. Walmart in particular – the largest retailer in the US – is widely watched by investors and analysts.
Learn more about Walmart’s latest first-quarter earnings release and what the analysts are forecasting for the stock below.
|Symbol for Invest.MT5 Account:||WMT|
|Date of Idea:||22 May 2023|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Walmart Q1 2023 Performance Breakdown
Here are some of the key highlights from the latest fiscal first-quarter earnings report from Walmart:
- Earnings per share of $1.47 vs $1.32 expected
- Revenue of $152.30 billion vs $148.76 billion expected
- Net income down to $1.67 billion from $2.05 billion a year earlier
- US same-store sales excluding fuel rose 7.4%
- E-commerce sales were up 27% year over year
- Q2 forecast earnings per share between $1.63 and $1.68, lower than the $1.71 expected
On the face of it, Walmart posted some impressive results for its fiscal first-quarter 2023 earnings report. It beat analyst estimates on both earnings per share and revenue. This was largely due to huge growth in its grocery sector which offset a decline in sales in its clothing and electronics division.
This has been a trend seen in the earnings of other big retailers last week. Consumers are buying less consumer discretionary and higher ticket items as they focus more on the necessities. Around 60% of all Walmart’s annual sales in the US come from groceries. While this may sound good, the margins are a lot lower in groceries which caused the company’s gross margin rate to decline year over year.
Chief Financial Officer John David Rainey said that spending trends started to weaken as the quarter developed with a sharp drop in February. He cited reasons for this such as the end of the pandemic emergency funding and a decline in tax refunds.
It is why Walmart provided lower-than-expected earnings per share forecast for the next quarter. On top of this, Rainey stated in the earnings call that “stubborn inflation” is causing a lot of uncertainty about how the end of the year will develop. Therefore tracking US economic data could give more insight into the direction of Walmart’s growth.
Walmart Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Walmart stock forecast in the past 3 months, there are currently 24 buy, 5 hold and 0 sell ratings on the stock. The highest price level for a Walmart stock forecast is $175.00 with the lowest price target at $155.00.
The average price target for a Walmart stock forecast is $165.64.
An Example Trading Idea for the Walmart Stock Price
An example trading idea for the Walmart share price could be as follows:
- Buy the stock on a break above $155.00 to allow for current volatility.
- Target just below the highest analyst price target of $175.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Walmart shares:
- If the target is reached = $200.00 potential profit ($175.00 - $155.00 * 10 shares).
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how uncertain the inflationary environment is and how this will affect consumer activity.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Walmart stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Walmart Stock in 4 Steps
With Admirals, you can buy shares in companies like Walmart with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the dashboard.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Click on the banner below to trade Walmart stock today! ▼▼▼
Do You See the Walmart Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Walmart's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
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