Wal-Mart To Wrap Up Retail Earnings Season Thursday

Wal-Mart Stores, Inc. WMT is the last big retailer to report its earnings, scheduled for release on Thursday. Until now, the majority of the retailers have revealed better-than-estimated EPSs. Ahead of the results, the stock traded down on Wednesday.

Investor focus is likely to shift toward the retailer's plan to take on Amazon.com, Inc. AMZN through its acquisition of Jet.com for $3.3 billion. The move is crucial for its future performance on the e-commerce side since Wal-Mart only generates $14 billion in revenue from online.

As far as earnings, Jefferies believes the momentum from comparable store sales is likely to have spilled over to the second quarter from the first quarter. Therefore, the brokerage expects the retailer to report 1.5 percent growth in comps, better than the outlook of 1.0 percent.

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Aside from that, the brokerage said the local retail segment continued to demonstrate consistent and robust execution, which resulted in analysts throughout the Street lifting their EPS estimation from $1.01 ninety days ago to $1.02 currently. Analysts are also looking for revenues of $120.16 billion for the second quarter.

Jefferies also sees a modest growth in retail spending in the next few quarters driven by an increase in the lower income consumers' wages. The Street is also looking for a growth in revenue in the upcoming quarters.

In the current month, Deutsche Bank maintains its Hold rating on Wal-Mart shares with a price objective of $70. Similarly, Jefferies retained its Hold rating with a price target of $72.

At time of writing, Wal-Mart shares were down 0.34 percent at $72.64.

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