What to look for when Walmart (WMT) reports Q4 earnings?

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Walmart Inc. (NYSE: WMT) is slated to release its fourth-quarter 2020 earnings results on Tuesday, February 18, before the market opens. The results will be benefited from the seamless connection between its stores and e-commerce business with a favorable economic environment contributing positively.

The company has been busy in investments for remodeling and technology of its stores as well as an e-commerce business in order to give a stiff fight with Amazon (NASDAQ: AMZN). Walmart has started improving search enhancing its website and executing better fundamentals that include product reviews, inventory mirroring and on-time delivery.

Read: Newell Brands Q4 earnings snapshot

The top-line growth will be driven by the domestic market, traffic arising from holiday sales, and expansion of e-commerce initiatives. Across international, the company has shown an acceleration in omnichannel capabilities backed by its partnership with JD.com, with Tencent, and the investments made in the Last Mile delivery.

Walmart expects the pace of evolving change to accelerate in the next five years as new technologies like autonomous, artificial intelligence, analytics and more are possible breakthroughs for future growth prospects. In mid-December 2019, the company and Nuro were testing an autonomous vehicle grocery delivery program for selective customers in Houston.

For achieving efficient growth, the company should focus on the most productive growth opportunities, increasing comparable store and club sales, accelerating eCommerce sales growth and expansion of omnichannel initiatives while slowing the rate of growth of new stores and clubs.

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Analysts expect the company’s earnings to rise by 2.10% to $1.44 per share and revenue will increase by 2.70% to $142.52 billion for the fourth quarter. The company has surprised investors by beating analysts’ expectations in all of the past four quarters. The majority of the analysts recommended a “hold” rating with an average price target of $129.63.

For the third quarter, Walmart posted a 92% jump in earnings driven by the steady momentum in the domestic market and e-commerce initiatives. For fiscal 2020, the management expects adjusted earnings per share to increase slightly, compared to last year, including Flipkart. Excluding Flipkart, full-year earnings are seen growing by a high single-digit percentage range.

Shares of Walmart ended Friday’s regular session up 0.38% at $117.89. The stock has been trading between $95 and $125.38 in the 52 weeks.

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