Wal-Mart shares fall the most in five weeks on Thursday, quarterly earnings slightly above expectations, third-quarter guidance raises concerns

Second-quarter earnings by Wal-Mart Stores Inc (WMT) were reported slightly above market expectations on August 17th, but however, the companys third-quarter earnings guidance raised certain concerns among investors.

Wal-Mart shares closed lower for the first time in the past four trading sessions on Thursday. It has also been the steepest daily loss since July 10th. The stock went down 1.58% ($1.28) to $79.70, after touching an intraday low at $78.36, or a price level not seen since July 26th ($77.94). In the week ended on August 13th the shares of the retail chain lost a mere 0.10% of their market value compared to a week ago, which marked the first drop in the past three weeks. The stock has neutralized earlier advance and is now down 0.36% so far during the current month, following a 5.70% surge in July. The latter has been the fifth gain out of six months and also the best performance since February. For the entire past year, Wal-Mart shares rose 12.76%.

The retailers total revenue went up 2.1% to $123.4 billion during the second quarter ended on July 31st compared to the same period a year earlier. In comparison, analysts on average had anticipated $122.8 billion in revenue.

Excluding currency exchange effects, the companys total revenue grew 2.9% to $124.4 billion.

Sales at US stores, which are open at least 12 months, were reported to have risen 1.8% year-on-year during the latest quarter, excluding fuel price fluctuations and including e-commerce, while traffic went up 1.3% year-on-year.

E-commerce growth in the United States remained strong, as net sales increased 60% during the quarter. According to Wal-Mart, clients continued to respond well to the chains new initiatives.

Net income attributable to shareholders, on the other hand, was reported to have shrunk 23% to $2.9 billion during the second quarter, because of a loss on extinguishment of debt in relation with a bond tender offer.

At the same time, Wal-Marts second-quarter earnings per share were reported at $0.96 compared with $1.21 during the same quarter a year ago.

Earnings per share, excluding special items, were reported at $1.08 during the latest quarter, which slightly surpassed the median analyst estimate ($1.07 per share).

Meanwhile, the low end of Wal-Marts fiscal year 2018 earnings forecast has been revised up to $4.30 per share from $4.20 previously, while the high end of the forecast has been kept at $4.40 per share. In comparison, analysts on average project $4.36 per share in full-year adjusted earnings.

Wal-Mart now expects its third-quarter adjusted earnings to be within the range between $0.90 and $0.98 per share, while the median forecast by analysts points to earnings of $0.98 per share.

According to CNN Money, the 31 analysts, offering 12-month forecasts regarding Wal-Mart’s stock price, have a median target of $82.00, with a high estimate of $92.00 and a low estimate of $61.00. The median estimate is a 2.89% surge compared to the closing price of $79.70 on August 17th.

The same media also reported that 15 out of 32 surveyed investment analysts had rated Wal-Mart Stores’ stock as “Hold”, while 14 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the Wal-Mart stock are presented as follows:

R1 – $79.83
R2 – $79.96
R3 (Range Resistance – Sell) – $80.09
R4 (Long Breakout) – $80.49
R5 (Breakout Target 1) – $80.95
R6 (Breakout Target 2) – $81.15

S1 – $79.57
S2 – $79.44
S3 (Range Support – Buy) – $79.31
S4 (Short Breakout) – $78.91
S5 (Breakout Target 1) – $78.45
S6 (Breakout Target 2) – $78.25

By using the traditional method of calculation, the weekly levels of importance for Wal-Mart Stores Inc (WMT) are presented as follows:

Central Pivot Point – $80.92
R1 – $81.47
R2 – $82.55
R3 – $83.10
R4 – $83.66

S1 – $79.84
S2 – $79.29
S3 – $78.21
S4 – $77.14