Goldman Sachs Maintains WMT Target Following 4Q Results

Wal-Mart Stores, Inc. (NYSE: WMT) reported 4Q EPS of $1.34 (excluding $0.07 in tax benefits), “versus our above-consensus estimate of $1.32,” Goldman Sachs reports.

“The company was able to leverage SG&A by 12 bp despite US SSS of -1.8%,” Goldman Sachs writes. “Gross margin increased 5 bp, reversing 3Q's 1 bp decline. Management provided a full year EPS guidance range of $4.35-$4.50, which brackets consensus of $4.43.

“The guidance is driven by net sales growth of 4%-6% and organic square footage growth of 3%-4%. 1Q guidance was pegged at $0.91-$0.96, placing consensus of $0.96 at the high end of the range.”

Goldman Sachs said that while it believes expectations for WMT were low heading into 4Q earnings, the comp decline of 1.8% could still pressure shares despite the better than expected EPS.

“Additionally, FY guidance is unlikely to push shares higher given the conservative 1Q guidance and wide range for the full year ($0.15 versus $0.10 range last year),” Goldman Sachs writes. “Our price target is unchanged.”

Wal-Mart Stores currently trades at $53.42.