It’s Walmart's earnings day: The stock shows promising momentum

Target raised its full-year net sales growth forecast to approximately 5% following a 3.8% increase in comparable sales during the second quarter, surpassing the consensus estimate of 2.5%. In response to these stronger-than-expected results and the upgraded outlook, Target’s shares closed at their highest level since October 2024. 

Home Depot, the world’s largest home improvement retailer, also exceeded Wall Street’s expectations by posting its strongest comparable sales growth in nearly four years. Meanwhile, rival Lowe’s reported better-than-expected second-quarter earnings, although its revenue and full-year guidance fell short of analysts’ projections.

Focus shifts to Walmart

Attention now turns to Walmart, the largest retailer in the United States, which is scheduled to release its second-quarter results before the market opens on Thursday. Analysts anticipate earnings of $0.74 per share on revenue of approximately $187 billion.

Walmart’s results are expected to provide valuable insight into the health of the U.S. consumer. Given Walmart’s extensive customer base and broad product range, investors regard the company as a key barometer of household spending. Consequently, the earnings announcement could lead to significant volatility in both Walmart shares and the wider retail sector.

Investors should closely watch several key indicators:

• U.S. comparable sales, excluding fuel

• Store traffic and transaction growth

• E-commerce and advertising performance

• Pricing trends and the effects of inflation

• Inventory levels and gross margins

• Management’s full-year guidance

Walmart (WMT) Technical Analysis

Walmart (NASDAQ: WMT) shares rebounded ahead of the company's quarterly earnings report, ending marginally lower around $114 on Wednesday. The stock has managed to break above the 50-day SMA, while the Relative Strength Index (RSI) has continued rising. This technical momentum suggests that the stock is likely to continue its upward trajectory, with bulls targeting key resistance levels at $120 and subsequently $123. Conversely, a decline below the support level at $106 would invalidate this bullish outlook.

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