Walmart is set to report Q4 earnings tomorrow of $1.52 on revenue of $159.8bn. Indicators suggest neutral-positive but poor earnings could wobble its stock.

Financials

Looking at Walmart’s 2022 financials against 2021, total revenue sits at $572bn with a gross profit of $143bn. Net income after tax and expenses totalled $13.6bn. Due to a $3bn rise in EBITA and a higher net profit, earnings per share came in at $4.90 for the year. The earnings are not as high as during the Covid surge but higher compared to the previous year. Over to the balance sheet, cash on hand sits strongly at $14.7bn, it has fallen by almost $3bn but that was because more cash was used in financing activities for the following year. However, total assets have declined to $244bn from $252bn in 2021, but as the assets fell, so did the total liabilities. A reduction in long-term debt made up the majority of the decrease. As a result of the above, Walmart managed to increase their equity by over $4bn year-on-year.

Technicals

From a technical overview, Walmart’s shares are currently trading at around $146.78 a share. We can see that on the 4-hourly interval, a double bottom pattern has taken place, or a ‘W’ shaped pattern. The double bottom is highlighted by the red lines, and the W-shape is marked out by the dotted trendlines. The double bottom pattern can at times be an indicator of a potential reversal trend, usually to the upside (bullish). Therefore, current resistance levels sit at $147.14 then at $147.28, a break above both of them could see the price head towards levels at $147.85 and $148.21. A close above $148.21 may confirm the bullish reversal trend. At present, support levels sit at $145.68 then at $145.24 then at $144.56. A break below $144.56 could see the price fall towards the key support resting at $143.40. Taking a look at the technical indicators, MACD has turned neutral and RSI is positive as it reads 64.

Summary

Overall, the financials of Walmart are healthy with a strong cash-on-hand pile. There has been a slight dip post-Covid, but that was a generic occurrence for almost all businesses around the world. Nevertheless, the numbers are not far off Covid levels and there has been gradual growth from 2021 to 2022 as shown above. Additionally, the balance of assets to liabilities is intact and should only continue into the near future, unless huge long-term debts are acquired. The technicals suggest a neutral-positive stance on the 4-hour timeframe, and the daily timeframe suggests a positive. Although, investors should note that Walmart is set to report final quarter earnings tomorrow before the market opens. It is expected to report $1.52 on revenue of $159.8bn. A negative report or guidance could wobble its stock price.