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Retail stocks Walmart (WMT) and Target (TGT) are set to report third-quarter earnings this week ahead of a busy holiday season. Target stock broke out of a base Monday while WMT stock fell modestly.
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Walmart and Target are expected to report rising earnings and sales vs. the year-ago quarter. But growth is slowing, while clouds are on the horizon as the retailers gear up for the holidays.
The National Retail Federation expects sales during November and December to grow by 8.5% to 10.5% vs. 2020. However, supply chain issues remain a concern as container ships faced a traffic jam at the Port of Los Angeles last month. Shoppers have started their gift shopping early to ensure their presents arrive on time.
Walmart Earnings
Estimates: FactSet analysts see Walmart earnings climbing 4.5% to $1.40 per share with sales edged up 0.2% to $135 billion.
Results: Check back before the market opens on Tuesday.
Stock: Shares fell 0.8% to 146.52 on the stock market today. WMT stock is consolidating with a 153.76 buy point. However investors need to be cautious buying a stock ahead of earnings as a slight miss in analyst expectations could send the stock tumbling.
The relative strength line for WMT stock has been lagging for some time, reflecting share price underperformance vs. the S&P 500 index.
Target Earnings
Estimates: Analysts see Target earnings per share up 1.1% to $2.82 with sales jumping 8.6% to $24.58 billion.
The retail stock announced last month that it is teaming up with Affirm (AFRM) and Sezzle for the holiday season, becoming the latest to jump on the buy-now-pay-later trend popular with younger shoppers.
Results: Check back before the market opens Thursday.
Stock: Target stock climbed 1.8% to 264.80, hitting a record high intraday. TGT stock is breaking out of a cup with handle base with a 262.61 buy point. However, the same caveat with buying a stock before applies.
Target is the top-ranked stock in IBD’s Retail-Major Discounter Chain group.
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