Walmart's stock fell 8.1% as the global retailer issued a wary earnings outlook for the current year.
The Bentonville, Ark.-based company raised its sales and earnings guidance for the full 12 months, but the per-share number mostly fell short of the average analyst estimate. The outlook came after Walmart reported slightly better-than-expected results for the third quarter. Through Wednesday, the stock had risen nearly 20% in 2023. Walmart's sales increased by 5.2 per cent to 160.8 billion US dollars in the quarter under review, exceeding the consensus estimate of 159.7 billion dollars. At the bottom line, Walmart earned 453 million dollars or 17 cents per share, compared to a net loss of 1.8 billion dollars or 66 cents per share a year ago. Adjusted, Walmart reported a profit of 1.53 dollars per share for the months of July to September. This is more than analysts surveyed by Factset had anticipated at an average of 1.52 dollars. For the full year, Walmart forecast adjusted earnings per share of between 6.40 and 6.48 dollars. However, analysts had previously expected the company to earn more, with an average of 6.50 dollars per share. Walmart anticipates sales growth ranging from 5 to 5.5 per cent this year. The analysts' consensus so far has been for five per cent growth.

On Thursday, the SMI lost 0.6 per cent to 10,643 points. Among the 20 SMI stocks, there were 15 losers and 5 gainers. A total of 18.63 (previously: 23.38) million shares were traded. Alcon extended its losses of the previous day and fell by 1.8 per cent. The pharmaceutical company, which specialises in eye diseases, reported disappointing figures on Wednesday. Richemont (-1.8 per cent), which has been suffering from the poor state of the Chinese economy for some time, was equally weak. Competitor Swatch even lost 2.1 per cent. Similarly, Givaudan (-1.4%) was among the biggest decliners. The fact that Zurich Insurance signalled higher dividends did not help the stock (-0.5%). By contrast, Swisscom (+0.8%), Partners Group (+0.6%) and Lonza (+0.6%) were at the top end of the performance spectrum. Among the heavyweights, Nestle in particular weighed on the market, with its shares falling by 1 per cent. Roche and Novartis fared better (-0.5% each).

The European stock markets lost ground on Thursday, as investors caught their breath after three consecutive sessions of gains on hopes that the cycle of monetary tightening by the major central banks would come to an end. The Stoxx Europe 600 index fell by 0.7% to 451.3 points. In Paris, the CAC 40 and SBF 120 lost 0.6% each. The DAX 40 in Frankfurt gained 0.2%, buoyed by good results from the Siemens conglomerate, while the FTSE 100 in London closed down 1%. Elior jumped 9.7% to €2.27. Seamless tube manufacturer Vallourec (+5.2%) raised its gross operating profit (EBIT) target for 2023 and published better-than-expected results for the third quarter. British luxury group Burberry plunged 11.2% in London on Thursday, after issuing a profit warning for the year ending 31 March 2024. In its wake, LVMH and Kering shed 1.8% and 2.7% respectively in Paris. German industrial conglomerate Siemens (+5.7% in Frankfurt) reported a good performance in the fourth quarter and encouraging forecasts for the coming financial year.

Earnings selloffs in Cisco Systems and Walmart pulled down the Dow. But the broader market narrowly overcame those drags as well as tumbling energy shares to keep the November rally going. The S&P 500 added 0.1%. The tech-oriented Nasdaq Composite eked out a smaller gain than that and is now up 9.8% this month. The Dow Jones Industrial Average shed about 0.1%, or 46 points. Cisco, the network equipment giant, cut sales forecasts and lost 9.8%, or more than $20 billion in market value, to pull the S&P and the Dow lower. Walmart was the next-worst performer in both indexes, down 8.1%, after quarterly profit metrics fell short of analysts’ expectations. Cybersecurity firm Palo Alto Networks, Chinese e-commerce giant Alibaba, retailers Bath & Body Works and Shoe Carnival each also declined at least 5% following their own earnings reports. U.S. listed shares of luxury apparel maker Burberry lost more than 10%. Department store owner Macy’s, chemical maker Berry Global and German technology conglomerate Siemens bucked the trend and rose after disclosing results. Energy was the hardest-hit sector on Thursday, with shares in the S&P 500 collectively losing 2.1% in response to swelling fuel supplies and falling prices. Network equipment supplier Cisco Systems (-9.8%) reported higher-than-expected results for the three months to 28 October, but cut its revenue and earnings per share forecasts for the full 2023-2024 financial year to the end of July. The unionised employees of General Motors (-2.3%) in the United States approved by a narrow majority the new collective agreement negotiated by the United Auto Workers (UAW), putting an end to the industrial dispute which culminated in a six-week sector strike this autumn.

Stocks in Asia mostly fell on Friday. The stock market in Hong Kong fell the most. The Hang Seng Index lost 2.1 per cent. Sentiment was weighed down by Alibaba. The share price dropped by 10 per cent. After the close of trading in Asia on Thursday, the technology giant cancelled the planned spin-off of its cloud division. As a result, other sector stocks also declined markedly in Hong Kong. Beidu shed 5.5 per cent and Meituan 3.6 per cent. In Hong Kong, the shares of China Evergrande declined by 5.5 per cent, Shimao slipped by 1.6 per cent and China Vanke by 2.0 per cent. On the Chinese mainland, the Shanghai Composite lost 0.3 per cent. The Tokyo stock exchange was 0.3 per cent firmer at 33,523 points. In South Korea, the Kospi slid 0.9 per cent.

Long-dated U.S. government debt yields dropped sharply on Thursday as investors weighed cooler economic data and comments from Walmart’s chief executive indicating he is bracing for a “period of deflation.” The 10-year Treasury yield fell by 9 basis points to 4.449%. The 10-year Treasury yield declined by 7 basis points to 4.848%.

Target price Avolta: Goldman Sachs downgrades to CHF 40 (44) - Neutral
Target price Alcon: JPMorgan lowers to CHF 74.40 (78.60) - Overweight
Price target Richemont: RBC cuts to CHF 125 (130) - Sector Perform

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