The second-quarter earnings season unfurls fervently, with many prominent companies slated to report their financial standings in the upcoming week. The prevailing sentiment anticipates another phase of growth, particularly in the Tech sector.
Among the stalwarts showcasing their fiscal prowess next week are Home Depot HD, Walmart WMT, and Deere & Co. DE. Let’s delve deeper into the unfolding expectations preceding these impending revelations.
Home Depot
Home Depot’s stock has traversed choppy waters in 2024, registering a mere 2% ascent overall, lagging behind the S&P 500 index. Projections for the impending quarter have sagged in recent months, with an estimated earnings per share of $4.59 hinting at a 1.3% dip from the preceding year.
The company witnessed a 2.8% decline in comparable sales during the quarter, instigating a slightly adverse market response post-earnings. Nonetheless, HD reiterates confidence in its yearly guidance, citing potential benefits from its product mix.
Of noteworthy concern is the ongoing weakness in high-priced discretionary goods, a prevailing trend for several quarters now. The surge in big-ticket consumer spending during the pandemic encapsulated a front-loaded demand scenario.
The revenue outlook remains unchanged, with a modest 0.8% sales downturn prognosticated for HD. Valuation metrics loom relatively elevated on the horizon, with the current forward 12-month earnings multiple of 22.8X standing above the five-year median.
Walmart
Walmart shares have exhibited a commendable performance in 2024, bolstered by favorable quarterly results with a noticeable uptick in profitability. Earnings surged by 22% year-over-year in the latest period, accompanied by a 6% climb in sales.
Market analysts maintain a positive outlook for the upcoming quarter, with the Zacks Consensus EPS estimate of $0.65 reflecting a 1.6% uptick over recent months and projecting a robust 6.5% year-over-year growth. Sales expectations stand at a robust $168.4 billion.
A highlight for Walmart remains its exemplary performance in eCommerce sales, acclaimed for its digital initiatives. Global eCommerce sales soared by 21% year-over-year in their latest review, underscoring another compelling quarter for the retail giant in this domain.
The impending report is poised to scrutinize this metric yet again, as favorable results could reinforce Walmart’s digital commerce momentum.
Deere & Co
Deere’s stock has faced headwinds in 2024, witnessing an approximate 11% downturn and evidently trailing the S&P 500. Pressure mounted on the shares post the recent consecutive releases, manifesting a downtrend.
The most recent financial disclosure unveiled a 12% year-over-year sales slump, attributable to the waning global demand for agricultural and turf products. Nevertheless, the company stands firm on a stable construction industry scenario, portraying a silver lining amidst the cloud.
Stance taken by analysts steers towards pessimism for the imminent report, with the anticipated $5.85 per share signaling a decline exceeding 15% since mid-May.
The CEO exudes confidence in the company’s resilience, affirming, ‘Thanks to the dedication and hard work of our team, we continue to demonstrate structurally higher performance levels across business cycles and are benefitting from stability in construction end markets amid declining agricultural and turf demand.’
The stock presently boasts a Zacks Rank #4 (Sell) as it braces for the impending disclosure.
Bottom Line
The critical second-quarter earnings cycle unfolds with predominantly positive outcomes thus far. As the week progresses, illustrious large-cap entities, including Home Depot HD, Walmart WMT, and Deere & Co. DE, are set to unveil their finance status.