Wall Street Edges Up in Face of Unprecedented Market Volatility
The stock market bounced back from the January CPI-based drop, as determined bulls seized the opportunity to buy the dip in February. The 21-day moving average once again provided reliable support, underscoring the investors’ unrelenting fervor to stay heavily invested in the market in 2024.
In the wake of Wall Street recalibrating its odds for the second Fed rate cut, questions abound about the market’s rapid rebound. Yet, the precise timing of rate cuts seems to matter less to the market than the certainty that the Fed will cut soon, as it is almost certain to do.
Amidst this uncertainty, the bullish case centers on Fed rate cuts, robust earnings growth, and the AI boom, bolstering every small pullback since the market surged off its October lows.
Walmart – Riding the New Wave of Retail and Digital Expansion
Following its post-Q3 release selloff, Walmart has recouped all its losses, trading close to fresh highs ahead of its earnings report. Thriving in the new retail era, Walmart has thrown down the gauntlet to Amazon with its subscription service, Walmart+. The retail giant is also ramping up its digital advertising business and fostering greater technological advancements across its operations.
Expected to post 5.5% same-store sales growth and 5.5% higher revenue, Walmart is set to boost its adjusted earnings by 3%, according to Zacks estimates. The company is poised to grow its revenue by 3% next year, reaching over $666 billion and expanding earnings by 8%.
WMT stock has climbed 70% over the last five years, exceeding the retail sector’s 42%. Despite trading 8% below its average Zacks price target and at a 10% discount to its highs, Walmart remains a stalwart of the U.S. economy and continues to pay a dividend.
Intuit Inc. – Embracing Innovation and Sustained Growth
Behind TurboTax and other tax and accounting software, Intuit leveraged its pandemic success to venture into new tech and financial arenas. With acquisitions like Credit Karma and Mailchimp, Intuit’s portfolio now spans various tools and software, covering taxes, small business financial management, email marketing, and personal financial services.
Having maintained revenue growth between 11% and 32% for seven years, Intuit is projected to hike sales by 12% in FY24 and an additional 13% in FY25, reaching $18 billion. Current Zacks estimates anticipate 14% adjusted earnings growth for both fiscal years.
With a solid balance sheet and 22 of 27 brokerage recommendations from Zacks rating it as “Strong Buy,” Intuit has witnessed a meteoric 2,800% surge in the last 20 years, outpacing tech sector stocks by six-fold and lapping Microsoft’s gains twofold in the past decade. Despite surging 62% in the last year, INTU still trades slightly below its all-time highs.
A stalwart in the home improvement arena, Home Depot caters to both DIY consumers and professionals. Despite a projected revenue slip of 3.5% in FY23, representing its first year-over-year decline since 2009, the company is expected to bounce back to sales and earnings growth in FY24.
Having posted 20% revenue growth in FY20 and over 14% higher sales in FY21, Home Depot’s adjusted EPS surged by 17% and 29%. This exceptional performance is a testament to the company’s robustness in coping with market challenges.
Despite the turbulence, Home Depot’s historical resilience underscores its ability to navigate through market fluctuations and maintain long-term sustainability even in the face of short-term challenges.
The Home Depot’s Strong Long-Term Potential Prospects Upheld by Multiple Positive Factors
Home Depot’s current dividend yield stands at 2.3%, with a remarkable 13% annualized increase in its payout over the past five years. Their shares have skyrocketed by over 1,600% in the last 15 years, surpassing both the Zacks Econ Sector’s 600% and the S&P 500’s 580%. Despite a recent 17% surge, the stock still trades 14% below its peaks.
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Walmart Inc. (WMT) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
