The world's largest brick-and-mortar retailer — Walmart WMT — is scheduled to report its third-quarter fiscal 2025 results on Nov. 19, before market open. Let’s take a closer look at its fundamentals ahead of the earnings release.
Walmart has gained 14.3% over the past three months, outperforming the Zacks industry average growth of 9.1%. The outperformance is likely to continue if Walmart comes up with an earnings beat (read: Retail ETFs in Focus Ahead of Big-Box Q3 Earnings).
This has put ETFs having a substantial allocation to the retailer like Consumer Staples Select Sector SPDR Fund XLP, Vanguard Consumer Staples ETF VDC, Fidelity MSCI Consumer Staples Index ETF FSTA, VanEck Vectors Retail ETF RTH and iShares Evolved U.S. Discretionary Spending ETF IEDI in focus ahead of its quarterly earnings.
Earnings Whispers
Walmart has an Earnings ESP of +1.44% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The retailer saw no earnings estimate revision over the past 30 days for the to-be-reported quarter. The Zacks Consensus Estimate for the fiscal third quarter indicates substantial year-over-year growth of 3.9% in earnings and 4.2% in revenues. The company’s earnings track record is robust. It delivered a four-quarter average earnings surprise of 6.89%.
Analysts are bullish on Walmart, with an average brokerage recommendation (ABR) of 1.20 made by 38 brokerage firms. Out of them, 32 analysts rated the stock Strong Buy and 4 rated Walmart as a Buy. Strong Buy and Buy respectively account for 84.21% and 10.53% of all recommendations. The average price target for Walmart comes to $87.16. The forecasts range from a low of $68.00 to a high of $98.00.
Walmart has a VGM Score of A but belongs to a bottom-ranked Zacks industry (in the bottom 13%).
What to Expect
A few analysts, like Piper Sandler, raised the target price on the stock ahead of earnings. Analysts expect Walmart to deliver another strong quarter, fueled by ongoing innovation, including advanced technology to enhance customer experience.
The mega-retailer lifted its fiscal 2025 guidance in the fiscal second-quarter release. It now expects revenues to increase 3.75%-4.75%, up from the prior outlook of 3%-4%, and earnings per share in the range of $2.35-$2.43, up from the prior guidance of $2.23-$2.37.
For third-quarter fiscal 2025, Walmart expects sales to grow 3.25%-4.25% and adjusted earnings per share in the range of 51-52 cents.
ETFs to Watch
Consumer Staples Select Sector SPDR Fund (XLP)
Consumer Staples Select Sector SPDR Fund targets the broad consumer staples space and follows the Consumer Staples Select Sector Index. It holds about 38 securities in its basket with Walmart taking the third spot at 9.1%. XLP has the largest allocation in consumer staples distribution & retail at 29.9%, while household products, beverages, and food products account for a double-digit allocation each. Consumer Staples Select Sector SPDR Fund is the most popular consumer staples ETF with AUM of $16.2 billion and an average daily volume of 9 million shares. XLP charges 9 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Will Trump's Tariffs Fuel Inflation? ETFs in Focus).
Vanguard Consumer Staples ETF (VDC)
Vanguard Consumer Staples ETF also targets the broad consumer staples space by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 104 stocks in its basket, with Walmart occupying the third position, with an 11.4% allocation. Vanguard Consumer Staples ETF manages a $7.1 billion asset base and charges a fee of 10 bps per year. VDC trades in a good average volume of around 83,000 shares per day and has a Zacks ETF Rank #3 with a Medium risk outlook.
Fidelity MSCI Consumer Staples Index ETF (FSTA)
Fidelity MSCI Consumer Staples Index ETF offers broad exposure to the consumer staples sector by tracking the MSCI USA IMI Consumer Staples Index and holds 106 stocks in its basket. Of these, Walmart takes the third spot with an 11.3% share. Fidelity MSCI Consumer Staples Index ETF has amassed $1.2 billion in its asset base while trading in a good volume of around 104,000 shares a day, on average. FSTA charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 with a Medium risk outlook (see: all Consumer Staples ETFs here).
VanEck Vectors Retail ETF (RTH)
VanEck Vectors Retail ETF provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Walmart takes the second spot with an 8.4% share. VanEck Vectors Retail ETF has amassed $233.5 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 3,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares U.S. Consumer Focused ETF (IEDI)
iShares U.S. Consumer Focused ETF is an actively managed ETF providing exposure to U.S. companies with a focus on U.S. consumer spending and consumer goods. It holds 178 stocks in its basket, with Walmart occupying the fourth position at 7.6% share. iShares U.S. Consumer Focused ETF has accumulated $29.7 million in its asset base and charges 18 bps in fees per year. Volume is paltry for IEDI as it exchanges 6,000 shares a day, on average.
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