Walmart (WMT) Earnings Preview, Morgan Stanley Expects Sales Upside but Expectations are High

Morgan Stanley analyst Simeon Gutman reiterated an Overweight rating and $170.00 price target on Walmart (NYSE: WMT) expecting sales upside, some margin pressure, in-line/slight EPS beat & potentially muted stock reaction.

The analyst stated "We think the market is expecting a WMT US comp beat in the 6-8% range vs. consensus +5.3% and implied guidance of at least 4%. At one point we think expectations were for a higher comp in the 8-9% range but the bar has come down given overall Retail sales moderation post Holiday. 6-8% comps seem reasonable as: 1) holding stacks vs. Q3 would imply a 7-8% comp, 2) Q4 got off to a good start, and 3) Grocery industry sales momentum has held firm. We've heard a range of expectations on US/total gross margin; bulls are looking for slight contraction (in the 5-15 bps range, in-line with consensus at -10 bps), while bears are expecting closer to 30-40 bps of contraction."

For an analyst ratings summary and ratings history on Walmart click here. For more ratings news on Walmart click here.

Shares of Walmart closed at $135.33 yesterday.

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