Target Stock Breaks Out Before Q3 Results; Walmart Earnings Due Tuesday - Investor's Business Daily

Walmart (WMT) reported better-than-expected third-quarter earnings early Tuesday, as high inflation spurred more customers to seek out its discount prices. Target (TGT) is set to report early Thursday. WMT stock reversed slightly lower before the open. Target stock, which broke out of a base on Monday, edged higher.

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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.

Meanwhile, October retail sales rose 1.7%, the Commerce Department reported early Tuesday, better than forecasts for 1%. Sales excluding autos also popped 1.7%, with sales excluding excluding autos and gas climbed 1.4%. Those beat views as well.

Walmart Earnings

Estimates: FactSet analysts saw Walmart earnings climbing 4.5% to $1.40 per share with sales edged up 0.2% to $135 billion.

Results: Walmart earnings per share rose to $1.45 with revenue up 4.3% to $140.5 billion. U.S. same-store sales popped 9.2%. U.S. e-commerce sales rose 8% vs. a year earlier and 87% vs. two year earlier.

Outlook: Walmart expects U.S. Q4 comps growth of about 5%. Full-year comps should increase more than 6%, excluding fuel.

Stock: Shares initially rose before the open, but reversed lower to down 0.8% 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 rose 0.2% early Tuesday. Shares climbed 1.6% to 264.28, 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.

Follow Gillian Rich on Twitter for investing news and more.

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