Target and Walmart Earnings Comparison Analysis
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Fool
- Target Sales Recovery: Target's first-quarter comparable sales rose 5.6%, ending four consecutive quarters of decline, with total net sales reaching $25.4 billion and customer traffic increasing by 4.4%, indicating that the sales growth was driven by more shoppers rather than just price increases, which is a positive sign for the company's profit rebuilding efforts.
- Walmart Steady Growth: Walmart's first-quarter revenue increased by 7.3% to $177.8 billion, with U.S. comparable sales growing by 4.1%, primarily driven by traffic rather than price hikes, while global e-commerce sales surged by 26% and advertising revenue grew by 37%, showcasing the company's strong performance in higher-margin businesses.
- Profit Growth Comparison: Although Target's non-GAAP earnings per share rose by 32% to $1.71, Walmart's operating income only increased by 5%, impacted by rising fuel costs, leading the company to adopt a cautious stance on its financial outlook without raising its full-year guidance.
- Investment Value Analysis: Target trades at a price-to-earnings ratio of about 17 with a dividend yield of 3.6%, making it relatively cheap, while Walmart's P/E ratio is near 42 with a dividend yield below 1%; despite Walmart's higher valuation, its broader growth and momentum in high-margin businesses make it a more attractive investment choice.
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Analyst Views on WMT
Wall Street analysts forecast WMT stock price to rise
26 Analyst Rating
25 Buy
1 Hold
0 Sell
Strong Buy
Current: 118.900
Low
119.00
Averages
125.75
High
136.00
Current: 118.900
Low
119.00
Averages
125.75
High
136.00
About WMT
Walmart Inc. is a technology-powered omnichannel retailer. The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce Websites and mobile applications, located throughout the United States (U.S.), Africa, Canada, Central America, Chile, China, India and Mexico. It operates in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Decline in Consumer Spending: In immigrant-heavy communities, consumer spending saw a notable decline, with neighborhoods in Los Angeles experiencing a drop of up to 25% in spending within two months following the announcement of local ICE enforcement campaigns, exacerbating economic weakness.
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