Investors Party Over Walmart's Bambino Style Earnings Grand Slam, Nasdaq Posts 12% Gains...

Goodmorning and TGIF!

We had another day, another green dollar yesterday with the market once again posting a stellar tally to its winning streak as the Nasdaq is officially up 12% over the last nine sessions. “And to that, all God's people said Amen”. 

(Source: Giphy) 

Additionally, the S&P 500 and the Dow had their fair share of momentum as both indexes jumped up +1.61% and +1.39%, respectively - while the Russell 2000 small caps led the day's gains with a cool +2.45% gain (beating the Nasdaq by +0.11%). 

(Source: The Globe) 

So clearly as stated in yesterday morning's article, the bulls are back in town, and with the Fed’s cooling inflation data in the mix, investors are definitely looking forward to a few jello shots over the weekend. Ok, ok, I may be speaking for myself on that one… 

But with that said, while both the PPI and CPI readings this week have been the main fuel to the recent rally, Walmart’s earnings pretty much gave us a glimpse into what two-thirds of the U.S. GDP has been thinking over the past quarter. Spoiler: The people of Walmart are still cashin’ checks and breakin’ necks.

(Source: Peace Commission)

In short, Walmarts earnings came in hotter than a summer sidewalk in Texas, as the company's EPS body bagged estimates by 3.76% (Analysts predicted $0.65 while Walmart reported $0.67). On the other hand, revenue barely beat estimates by +0.23% as Walmart posted $167.77 billion, topping the $167.38 billion analyst had written down. 

(Source: Yahoo Finance) 

However, while top and bottom line estimates were clearly leaving investors satisfied with this consumer spending litmus test, Walmart’s trailing 12-month results threw up an absolute gambino style grandslam. For instance, compared to this time last year, Walmart’s revenue not only grew a whopping +6.05%,  but net income, diluted EPS, and net profit margin all catapulted 205.08%, 200%, and 187.27%.

(Source: Wall Street Journal)

This had investors partying in the pre-market through the close as the stock nailed a peak of +8.36% on the day, closing a smidge below 7%. For this reason, Walmart CEO, Doug McMilon, basically stole the spotlight as America’s #1 CEO (sorry Brian Niccols), as literally every part of the business grew in the second quarter, with e-commerce leading the charge with a 21% increase in the U.S. alone. Hell, even Sam’s Club threw in a strong performance, with same-store sales rising 5.2%. 

(Source: Store Brand) 

Now keep in mind though, this progress all occurred while grocery prices have been squeezing the life out of budgets with prices catapulting +1.1% over the past year - yet, Walmart is clearly still raking it in as consumers make sure they have plenty of toilet paper to cover their a$$ in case sh^t really does hit the fan. 

(Source: Know Your Meme) 

But still, even with looming recession fears positioned in the back of consumers (and investors) minds, CFO John David Rainey basically mentioned that they haven’t seen any shift in consumer behavior whatsoever. Which makes sense considering with a new private brand label in Walmart’s arsenal, called Bettergoods (GTFO “Great Value”), which offers healthier products for less than a 5 spot, Walmart is doing what Victoria’s Secret doesn’t do best: Pulling for everyone - regardless the size of income. 

(Source: New York Post) 

For this reason, Walmart ended up raising its full year-outlook, with a bit of caution for the latter half of the year. But still, even with that, while the brick and mortar side may not be as strong towards the end of the year (imaginary numbers until then), Walmart’s advertising revenue is mitigating potential revenue losses as it’s jumped 30% over the past 12 months.

So yeah, Walmart is definitely not only keeping budgets nice and happy, but they’re absolutely dominating the digital space as of now. Which is why, analysts are raving over the stock with a consensus price target at $106.30 indicating a 45.24% upside from current levels.

Additionally, outside of the financials, the technical side is also hotter than a jalapeño's armpit as all 17 of our Stocks.News indicators are sitting pretty in the strong buy section while all 15 moving averages are following suit. 

So as we can all see, with strong growth across all sectors from groceries to ecommerce and advertising, Walmart is legit thriving. Which is why right now, especially after these phenomenal numbers, Walmart is still the belle of the retail ball.

(Source: Giphy) 

Now of course, with the stock being up +37.82% YTD, we are no doubt in premium levels. So because of this, I’d definitely make sure to do further due diligence before adding or adjusting Walmart into your portfolio. Especially if you’re one of those who can’t handle a little heat from time to time. 

(Source: Giphy) 

But as always, whether you’re already in Walmart or you’re itching to get a piece of the action, only time will tell if the trend for Walmart continues. Yet, as of right now - the sentiment is clear: Walmart is ball busting all of its competitors, and continuing to prove that it’s still the OG of American Capitalism. 

At the time of this writing Walmart closed yesterday up +6.6% on the day.

Stocks.News holds positions in Walmart as mentioned in the article.