Walmart And Home Depot In Spotlight After Strong Reports
- Walmart and Home Depot easily beat analyst estimates.
- Walmart enjoys strong support in premarket trading.
- Retailers’ earnings will be the key driver for the market today.
S&P 500 futures rebounded closer to the positive territory in premarket trading after the release of better-than-expected reports from Walmart and Home Depot. Traders will pay close attention to the dynamics of these stocks during today’s trading session as strong demand for retailers’ shares may push the market to new highs.
Walmart Easily Beats Analyst Estimates
Walmart reported revenue of $152.6 billion and adjusted earnings of $1.77 per share, beating analyst estimates on both earnings and revenue. U.S. comparable sales increased by 6.5%, highlighting strong demand.
In the third fiscal quarter, Walmart expects to report consolidated net sales growth of about 5%, which will be negatively affected by $1.3 billion from currency fluctuations. Adjusted earnings per share are expected to decline by 9.0 – 11.0%.
The retailer noted that its actions to improve inventory levels in the U.S. put pressure on profit margin in the second fiscal quarter and the outlook for the full fiscal year.
The market was skeptical about Walmart’s performance ahead of earnings results, so the stock got a major boost after the release of the report. Currently, Walmart is up by more than 4% in premarket trading.
Home Depot Reaffirms Guidance For Fiscal Year 2022
Home Depot reported revenue of $43.79 billion and GAAP earnings of $5.05 per share, beating analyst estimates on both earnings and revenue. The retailer noted that comparable sales in the U.S. increased by 5.8% in the second fiscal quarter.
The company reaffirmed its guidance for fiscal 2022. Home Depot expects that comparable sales will grow by 3.0%, while diluted earnings per share will grow in the mid-single digits.
Home Depot is currently down by more than 1% in premarket trading, and it remains to be seen whether the strong report will be sufficient enough to push the stock to higher levels.
Traders’ Reaction To Key Earnings Reports Will Be The Key Driver For S&P 500 Today
S&P 500 enjoyed a strong rally from June lows. Technically, the market is overbought. In this environment, stocks will need significant positive catalysts to continue the rally without a material pullback.
The reaction to retailers’ earnings will show whether traders are ready to buy big names at current levels. Walmart and Home Depot are not cheap after the recent rebound, so their reports will be a great test for traders’ risk appetite.
For a look at all of today’s economic events, check out our economic calendar.