Market to Open Lower as HD and WMT Raise Guidance

The stock market looks to open lower today as Germany reported economic growth of just 0.1% for the second quarter. That’s just terrible. The whole Eurozone economy grew by 0.2% in the second quarter which was down from 0.8% for Q1.

This news doesn’t come at a good time for Europe as Sarkozy and Merkel are meeting today in a summit. There had been some talk about Europe issuing “eurobonds” to help fix the mess everyone’s in, but apparently that’s not on the agenda for today’s meeting.

Perhaps the most important market news this morning is Walmart’s ($WMT) earnings report. The company already told us that Q2 (which ends with July) would come in between $1.05 and $1.10 per share. They weren’t lying; WMT earned $1.09 per share although same-store sales were flat.

More importantly, Walmart said that Q3 should range between 95 cents and $1 per share. The company also raised its full-year EPS range from $4.35 to $4.50, to $4.41 to $4.51. This means the stock is going for just 11.6 times the midpoint of the new full-year guidance.

They’re not the only one boosting guidance. Home Depot ($HD), which is also a Dow stock, just reported a 14% earnings increase. For Q2, HD earned 86 cents per share which was three cents better than estimates. The company raised full-year EPS guidance from $2.24 to $2.34. The stock is going for 13.4 times this year’s estimate which seems about right.

Posted by on August 16th, 2011 at 8:38 am


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