Wal-Mart (WMT) Stock Up, Earnings Expected Tomorrow
NEW YORK (TheStreet) -- Shares of Wal-Mart Stores (WMT) - Get Report are rising by 0.71% to $56.82 at the start of trading on Monday morning, one day before the retail giant reports its fiscal 2016 third quarter earnings results.
The company will announce its latest financial results before the market open on Tuesday morning.
Analysts are expecting the Bentonville, AR-based company to report a year over year decline in both earnings per share and revenue for the most recent quarter.
Wal-Mart has been forecast by analysts surveyed by Thomson Reuters to post earnings of 98 cents per share on revenue of $117.86 billion for the three month period ended in October.
The company's earnings came in at $1.15 per share on revenue of $119 billion for the fiscal 2015 third quarter.
Additionally, Warren Buffett's Berkshire Hathaway (BRK.A) (BRK.B) has reduced its stake in both Wal-Mart and Goldman Sachs (GS) in order to help fund its Precision Castparts deal, the Wall Street Journal reports.
Berkshire Hathaway sold 4.2 million shares of Wal-Mart and 1.67 million shares of Goldman Sachs.
Separately, TheStreet Ratings team rates WAL-MART STORES INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate WAL-MART STORES INC (WMT) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WMT's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.17 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Looking at the price performance of WMT's shares over the past 12 months, there is not much good news to report: the stock is down 28.10%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food & Staples Retailing industry average. The net income has decreased by 15.1% when compared to the same quarter one year ago, dropping from $4,093.00 million to $3,475.00 million.
- You can view the full analysis from the report here: WMT
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.