The Federal Reserve is expected.To raise interest rates as soon as March. Stephen Juneau, economist at Bank of America Corp.BAC), said, All of the data is pointing to a very tight labor market. All of these data support the idea that the Fed will move forward to increase the Fed’s March interest rate.
Additionally, the Dow Jones Industrial Average (DJIA), which suffered from disappointing fourth-quarter earnings by major U.S. banks, has seen a 3.3% drop in the past week. According to Shark Tank investor Kevin OLeary stock market volatilityIt is expected that it will be apparent by 2022.
We believe it is reasonable to place a bet on stocks that have sound fundamentals, such as Walmart Inc.WMT), PepsiCo, Inc. (PEP), and The Kroger Co. (KR), that are thriving despite the shaky market environment. The SPDR S&P 500 ETF trusts have a 1.5%, 2.7% and 3.9% price gain over the past month compared to the SPDR S&P 500 ETFs (SPY) 1.8% decline over the same period.
Walmart Inc. (WMT)
WMT in Bentonville is a retail giant that engages globally in retail, wholesale and other unit businesses. The company operates through three segments: Walmart U.S.A., Walmart International and Sams Club.
WMT announced on Jan. 5 that it would expand its InHome delivery service to more customers. The company plans to make the service available to 30 million households in the United States by 2022. The venture is expected be profitable for the company.
Veriteque USA, Inc., announcing the launch of Verifique as a registered seller in the Walmart marketplace on December 21st. Presumptive field tests will be offered for a particular use in homes and schools through the company’s marketplace to increase the company’s revenue stream.
WMT’s fiscal third quarter revenues rose 4.3% year over year to $140.53 Billion. Operating income increased 0.2% to $5.79Bn, compared to the same period last. Its adjusted EPS rose 8.2% to $1.45 from the previous-year quarter.
Streets’ fiscal 2022 $6.41 EPS estimate indicates a 17% increase year-over-year. The Streets $571.25 million revenue estimate for the same fiscal year represents a 2.2% increase over the previous year. WMT has exceeded consensus EPS estimates for three of the four trailing quarters, which makes it impressive.
WMTs stock has increased 1.5% in value over the past month, closing yesterday’s trading session with $141.22.
WMT’s strong fundamentals reflect in itsPOWR Ratings. The stock has an overall score of A. This equates to Strong Buy according to our proprietary rating system. The POWR Ratings are calculated using 118 factors, each factor being weighted to the best degree.
WMT has a Growth Value, Stability and Quality grade B. In the 39 stock Grocery/Big Box Retailersindustry, it is ranked number 5. The industry is rated as A. You can also view the POWR Ratings for Sentiment & Momentum.Click here.
PepsiCo, Inc. (PEP)
PEP is a well-known food and beverage company that operates worldwide. The Harrison, N.Y.-based firm’s brands include Cheetos. Fritos. Lays Pepsi. 7UP. Mountain Dew.
Lays, a marquee brand from PEPs Frito-Lay division launched its brand-new product line Lays Layers. PEP brand Doritos revealed the availability of its new tortilla chip flavor on Dec 21. These additions will likely expand the company’s product line and increase its sales.
PEP declared a quarterly dividend of $1.075 per share on its common stock on November 18. This was a 5% increase over its previous year. The dividend was paid January 7. The company’s ability to pay back shareholders has led to the dividend increase.
PEPs’ fiscal third quarter net revenue, which ended Sept. 4, increased 11.6% year-overyear to $20.19 million. Its non-GAAPOperating profit rose 6.5% to $3.24Billion in the quarter prior to that of the prior-year. Net income and net loss per common share due to PEP rose 7.4% and 7.8% from the prior-year period to $2.48 and $1.79, respectively.
The consensus EPS estimate for fourth quarter at $1.51 indicates a 2.7% year over-year increase. The consensus revenue estimate of $24.21 million for the same period is 7.8% more than the previous year quarter. PEP’s impressive surprise earnings record is not to be missed. In each of the four preceding quarters, it has topped consensus estimates for EPS.
Yesterday’s trading session closed at $173.94. The stock gained 23.1% and 11.6% respectively over the last year.
It’s not surprising that PEP has an overall rating of B, which means Buy in our POWR Rating System. PEP is rated B for Stability & Quality. It is #10 among 35 stocks in theBeverages industry. The industry is rated at B.
Click hereClick here to view the POWR Ratings for additional PEP (Growth Value, Momentum and Sentiment).
The Kroger Co.KR)
KR is a Cincinnati, Ohio-based Retailer that operates a variety of food and drug stores as well as multi-department and marketplace stores and price-impact warehouses. The company’s offerings include fuel, manufactured and processed food products, and fuel.
KR and Nuro, a robotics company, announced a new collaboration on January 12th with the introduction of Nuros’ third-generation autonomous delivery vehicle. Yael Csset, Senior Vice President at KR and Chief Information Officer, stated that autonomous vehicles continue to play an important role in our seamless ecosystem. This allows us to meet customers in their current context without compromising quality or value while also contributing to our long term growth and sustainability goals.
KR announced that a $1 billion share-repurchase program was authorized on December 30. It replaces the existing authorization. The company’s confidence in its ability to deliver strong shareholder returns and free cash flow is reflected in the new share repurchase programme.
KRs sales grew 7.2% year-overyear to $31.86billion in its fiscal third quarter ended November 6. Its adjusted net earnings attributed to KR came in the range of $589 million, which is 5.7% more than the previous-year quarter. The adjusted net earnings attributable KR per common stock rose 9.9% to $0.78, compared to the same period last.
Analysts predict that KRs EPS will rise 0.3% year-over year to $3.48 in its fiscal 2022. The Street also expects that its revenue will rise 3.6% over the previous year to $137.33 million for the same period. KR beat consensus EPS estimates in all four quarters.
KRs shares have risen by 42.9% in the past year and 16.5% in the past six months, closing yesterday’s trading session with $47.27.
These promising prospects are reflected in KRs POWR ratings. KR has an overall rating of A, which is equivalent to Strong Buy in our proprietary rating scheme. KR has an A rating for growth and a B for value and quality. It is ranked 9th in the Grocery/Big Box retailers industry.
In addition to the POWR Ratings grades that we have already mentioned, one can also see KR ratings of Momentum, Stability and Sentiment.Here.
WMT shares dropped $0.92 (-0.65%), Friday in premarket trading. WMT shares fell 0.92 (-0.65%) in premarket trading Friday. This compares to a -6.31% gain in the benchmark S&P 500 Index during the same time period.
About the Author: Anushka Dotti
Anushka is an analyst. Her interest in understanding the effect of wider economic changes on financial market markets inspired her to pursue a career involving investment research. More…