As the Q2 earnings season continues to unfold briskly, investors are eagerly awaiting the financial updates from a slew of prominent companies. Tech companies, in particular, are expected to demonstrate robust growth in the upcoming reports.
Home Depot Expectations
Home Depot’s stock prices have shown significant volatility in 2024, with a meager 2% increase overall, lagging behind the S&P 500 index. Analysts have revised the earnings forecast downwards for the pending quarter, with an estimated $4.59 per share, signaling a 1.3% dip compared to the previous year.
The company experienced a 2.8% drop in comparable sales during the period, leading to a negative market response post-earnings. Notwithstanding, Home Depot has reiterated its yearly guidance, expressing confidence in its product lineup’s potential. Notably, a persisting weakness in high-value discretionary items has been evident for successive quarters due to a surge in demand during the pandemic.
Revenue projections have remained steady, with an expected modest 0.8% decline in sales. Forward 12-month earnings multiple stands at 22.8x, surpassing the five-year median, indicating a somewhat elevated valuation.
Walmart Performance Outlook
Walmart shares have demonstrated solid growth in 2024, propelled by favorable quarterly results that showcased enhanced profitability. Earnings witnessed a significant 22% year-over-year upturn in the last quarter, while sales surged by 6%.
Positive sentiments prevail among analysts for the forthcoming quarter, with the Zacks Consensus EPS estimate standing at $0.65, up by 1.6% in recent months, indicating a 6.5% increase from the previous year. Revenue forecasts are in alignment, with an anticipated $168.4 billion in sales.
The stellar performance of Walmart’s eCommerce segment has been a key highlight, with a remarkable 21% year-over-year growth in global eCommerce sales reported in the last quarter. The company’s prowess in the digital arena has been instrumental in boosting investor confidence.
Deere & Co Challenges and Prospects
Deere & Co has encountered challenges in 2024, witnessing an approximately 11% decrease in share value, significantly underperforming against the S&P 500 index. The company faced market pressure following consecutive unimpressive releases.
In the latest report, Deere & Co experienced a 12% decline in sales year-over-year, attributed to softening global demand in the agricultural and turf sectors. Despite this, the company remains optimistic about the stable construction industry, which serves as a significant positive amidst the challenges.
Analysts have adopted a bearish stance for the upcoming report, with an anticipated $5.85 per share, marking a more than 15% decline since mid-May.
The CEO of Deere & Co expressed confidence in the company’s resilience, highlighting, “Thanks to the dedication and hard work of our team, we continue to demonstrate structurally higher performance levels across business cycles and are benefitting from stability in construction end markets amid declining agricultural and turf demand.” The stock currently holds a Zacks Rank #4 (Sell) status ahead of the release.
Final Thoughts
As we navigate through the critical Q2 earnings phase, the overall results have exhibited a positive trend. Investors are eagerly anticipating updates from several renowned large-cap companies, including Home Depot, Walmart, and Deere & Co.