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Amazon vs. Walmart: Which Retail Stock is a Better Pick?

According to a New York Times report earlier this week, there has been a shift in the way people are spending on retail. The report cited Factset data stating that
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According to a New York Times report earlier this week, there has been a shift in the way people are spending on retail. The report cited Factset data stating that in the 12 months ending in June, people spent in excess of $610 billion on Amazon.

In contrast, according to the report, brick-and-mortar retailer Walmart reported sales of $566 billion for the 12 months ending in July. It indicated that Amazon, the e-commerce giant, had dethroned Walmart.

Let’s compare these two retailers, Amazon and Walmart, using the TipRanks Stock Comparison tool, and see how Wall Street analysts feel about these stocks.

Amazon (NASDAQ: AMZN)

Late last month, Amazon delivered mixed second-quarter results. Net sales rose 27% year-over-year to $113.1 billion, but fell short of analysts’ expectations of revenues of $115.07 billion.

EPS came in at $15.12 per diluted share, versus $10.30 per diluted share in the same quarter last year. Analysts were expecting earnings of $12.22 per share.

According to Wells Fargo analyst Brian Fitzgerald, the revenue miss in Q2 was driven by 1P Online stores. A 1P online store refers to a first-party relationship with Amazon, wherein a given brand acts as a wholesaler and sells directly to Amazon as the retailer.

The analyst reiterated a Buy rating following the Q2 results but lowered the price target from $4,500 to $4,250, with a 32.8% upside on the stock.

However, third-party sellers (3P) on Amazon, comprised of small and medium-sized businesses, made up 56% of AMZN’s total paid units in Q2, a rise of 53% year-over-year. The company’s management stated at its Q2 earnings call that 3P sellers “were a big contributor to Prime Day's success,” back in June. (See Amazon stock chart on TipRanks)

The analyst estimates a robust “3P unit growth of 22% YY [year-over-year] and a strong two-year CAGR [compounded annual growth rate] of 37%. We estimate revenue per 3P unit grew a robust 10% YY.”

Fitzgerald noted another key positive for the stock, that is, Amazon’s Prime membership. However, Amazon noted on its earnings call that while Prime members continued to spend more, “growth in Prime member spend moderated compared to spending seen during the peak of the pandemic.”

However, Amazon continues to see strong Prime membership growth and user engagement, as it welcomed “more than 50 million new members in the past 18 months, and Prime member benefits usage remains high.”

The other two positives in favor of AMZN, according to the analyst, are the stellar growth in advertising and AWS (Amazon Web Services).

Advertising, part of the company’s Other revenues, jumped 83% year-over-year in Q2, excluding currency exchange fluctuations, “driven largely by continued acceleration in our ads business,” according to Amazon management.

AWS business segment saw a 29% year-over-year rise in revenues to $10.8 billion in Q2, and is currently at an annualized revenue run rate of $59 billion, up from $43 billion during the same period last year.

Annualized revenue run rate is calculated by multiplying, by 12, the revenue in the final month of the quarter.

In Q3, Amazon is projecting net sales in the range of $106 billion to $112 billion, while operating income is expected to be between $2.5 billion and $6 billion, slightly below the $6.2 billion generated in the same quarter last year. The e-commerce giant also expects to incur $1 billion in COVID-19 related costs.

Turning to the rest of the Street, consensus is that Amazon is a Strong Buy, based on 30 Buys. The average Amazon price target of $4,214.13 implies an approximately 31.6% upside potential from current levels.

Walmart (WMT)

Earlier this week, omnichannel retailer Walmart reported better-than-expected second-quarter results and lifted its full-year 2021 guidance.

The company reported adjusted earnings of $1.78 per share in Q2, up 14% year-over-year, and significantly surpassed the Street’s estimate of $1.56 per share. Additionally, total revenue climbed 2.4% to $141.05 billion, outpacing analysts’ estimates of $136.74 billion.

However, Walmart's International net sales declined 15.2% year-over-year to $23 billion, mainly as a result of divestitures.

Doug McMillon, Walmart’s President and CEO commented, “We had another strong quarter in every part of our business. Our global eCommerce sales are on track to reach $75 billion by the end of the year, further strengthening our position as a leader in omnichannel.”

The company’s market share in the United States increased when it comes to the grocery business, with strong comparable sales at 6.1%, led by Walmart's stores.

WMT continues to build a sizeable e-commerce business globally and expects to report $100 billion in global e-commerce sales over the near term. In the U.S., WMT e-commerce sales grew 6% year-over-year and 103% over a two-year period.

The company’s in-house advertising offering, Walmart Connect, saw sales jump 95% year-over-year, with a rise in new advertisers. (See Walmart stock chart on TipRanks)

Notably, Walmart’s management stated on its earnings call, “We're also rapidly expanding higher-margin businesses like advertising, data monetization and eCommerce marketplace, which gives us flexibility to invest aggressively for the future while growing profit near term. These businesses are in different places along the maturity curve, but we're scaling them.”

Jeffries analyst Stephanie Wissink approved of this strategy and said, “We are encouraged by management commentary and clear progress on key alt [alternate] revenue streams which, while still small, are beginning to benefit the model.” The analyst believes that these new revenue streams could unlock value for the stock.

The analyst reiterated a Buy rating and a price target of $184 (23.4% upside) on the stock, following the Q2 results.

Analyst Wissink is of the opinion that WMT’s inventory is positioned well for the second half of the year, as it went up 20% year-over-year. The analyst added that even as the management was confident about the second half of the year, certain general merchandise categories were running out of stock, due to supply constraints.

This has led the analyst to “believe that better access to goods would unlock upside to 2H outlook.”

Turning to the rest of the Street, consensus is that Walmart is a Strong Buy, based on 19 Buys and 3 Holds. The average Walmart price target of $172.24 implies an approximately 15.5% upside potential from current levels.

Bottom Line

While analysts are bullish about both stocks, based on the upside potential over the next 12 months, Amazon seems to be a better Buy.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.

The post Amazon vs. Walmart: Which Retail Stock is a Better Pick? appeared first on TipRanks Financial Blog.

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Government

Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary…

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Mike Pompeo Doesn't Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary of State Mike Pompeo said in a new interview that he’s not ruling out accepting a White House position if former President Donald Trump is reelected in November.

“If I get a chance to serve and think that I can make a difference ... I’m almost certainly going to say yes to that opportunity to try and deliver on behalf of the American people,” he told Fox News, when asked during a interview if he would work for President Trump again.

I’m confident President Trump will be looking for people who will faithfully execute what it is he asked them to do,” Mr. Pompeo said during the interview, which aired on March 8. “I think as a president, you should always want that from everyone.”

Then-President Donald Trump (C), then- Secretary of State Mike Pompeo (L), and then-Vice President Mike Pence, take a question during the daily briefing on the novel coronavirus at the White House in Washington on April 8, 2020. (Mandel Ngan/AFP via Getty Images)

He said that as a former secretary of state, “I certainly wanted my team to do what I was asking them to do and was enormously frustrated when I found that I couldn’t get them to do that.”

Mr. Pompeo, a former U.S. representative from Kansas, served as Central Intelligence Agency (CIA) director in the Trump administration from 2017 to 2018 before he was secretary of state from 2018 to 2021. After he left office, there was speculation that he could mount a Republican presidential bid in 2024, but announced that he wouldn’t be running.

President Trump hasn’t publicly commented about Mr. Pompeo’s remarks.

In 2023, amid speculation that he would make a run for the White House, Mr. Pompeo took a swipe at his former boss, telling Fox News at the time that “the Trump administration spent $6 trillion more than it took in, adding to the deficit.”

“That’s never the right direction for the country,” he said.

In a public appearance last year, Mr. Pompeo also appeared to take a shot at the 45th president by criticizing “celebrity leaders” when urging GOP voters to choose ahead of the 2024 election.

2024 Race

Mr. Pompeo’s interview comes as the former president was named the “presumptive nominee” by the Republican National Committee (RNC) last week after his last major Republican challenger, former South Carolina Gov. Nikki Haley, dropped out of the 2024 race after failing to secure enough delegates. President Trump won 14 out of 15 states on Super Tuesday, with only Vermont—which notably has an open primary—going for Ms. Haley, who served as President Trump’s U.S. ambassador to the United Nations.

On March 8, the RNC held a meeting in Houston during which committee members voted in favor of President Trump’s nomination.

“Congratulations to President Donald J. Trump on his huge primary victory!” the organization said in a statement last week. “I’d also like to congratulate Nikki Haley for running a hard-fought campaign and becoming the first woman to win a Republican presidential contest.”

Earlier this year, the former president criticized the idea of being named the presumptive nominee after reports suggested that the RNC would do so before the Super Tuesday contests and while Ms. Haley was still in the race.

Also on March 8, the RNC voted to name Trump-endorsed officials to head the organization. Michael Whatley, a North Carolina Republican, was elected the party’s new national chairman in a vote in Houston, and Lara Trump, the former president’s daughter-in-law, was voted in as co-chair.

“The RNC is going to be the vanguard of a movement that will work tirelessly every single day to elect our nominee, Donald J. Trump, as the 47th President of the United States,” Mr. Whatley told RNC members in a speech after being elected, replacing former chair Ronna McDaniel. Ms. Trump is expected to focus largely on fundraising and media appearances.

President Trump hasn’t signaled whom he would appoint to various federal agencies if he’s reelected in November. He also hasn’t said who his pick for a running mate would be, but has offered several suggestions in recent interviews.

In various interviews, the former president has mentioned Sen. Tim Scott (R-S.C.), Texas Gov. Greg Abbott, Rep. Elise Stefanik (R-N.Y.), Vivek Ramaswamy, Florida Gov. Ron DeSantis, and South Dakota Gov. Kristi Noem, among others.

Tyler Durden Wed, 03/13/2024 - 17:00

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International

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and…

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Riley Gaines Explains How Women's Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and bewildering tunnel of social justice cultism?  Global events have been so frenetic that many people might not remember, but only a couple years ago Big Tech companies and numerous governments were openly aligned in favor of mass censorship.  Not just to prevent the public from investigating the facts surrounding the pandemic farce, but to silence anyone questioning the validity of woke concepts like trans ideology. 

From 2020-2022 was the closest the west has come in a long time to a complete erasure of freedom of speech.  Even today there are still countries and Europe and places like Canada or Australia that are charging forward with draconian speech laws.  The phrase "radical speech" is starting to circulate within pro-censorship circles in reference to any platform where people are allowed to talk critically.  What is radical speech?  Basically, it's any discussion that runs contrary to the beliefs of the political left.

Open hatred of moderate or conservative ideals is perfectly acceptable, but don't ever shine a negative light on woke activism, or you might be a terrorist.

Riley Gaines has experienced this double standard first hand.  She was even assaulted and taken hostage at an event in 2023 at San Francisco State University when leftists protester tried to trap her in a room and demanded she "pay them to let her go."  Campus police allegedly witnessed the incident but charges were never filed and surveillance footage from the college was never released.  

It's probably the last thing a champion female swimmer ever expects, but her head-on collision with the trans movement and the institutional conspiracy to push it on the public forced her to become a counter-culture voice of reason rather than just an athlete.

For years the independent media argued that no matter how much we expose the insanity of men posing as women to compete and dominate women's sports, nothing will really change until the real female athletes speak up and fight back.  Riley Gaines and those like her represent that necessary rebellion and a desperately needed return to common sense and reason.

In a recent interview on the Joe Rogan Podcast, Gaines related some interesting information on the inner workings of the NCAA and the subversive schemes surrounding trans athletes.  Not only were women participants essentially strong-armed by colleges and officials into quietly going along with the program, there was also a concerted propaganda effort.  Competition ceremonies were rigged as vehicles for promoting trans athletes over everyone else. 

The bottom line?  The competitions didn't matter.  The real women and their achievements didn't matter.  The only thing that mattered to officials were the photo ops; dudes pretending to be chicks posing with awards for the gushing corporate media.  The agenda took precedence.

Lia Thomas, formerly known as William Thomas, was more than an activist invading female sports, he was also apparently a science project fostered and protected by the athletic establishment.  It's important to understand that the political left does not care about female athletes.  They do not care about women's sports.  They don't care about the integrity of the environments they co-opt.  Their only goal is to identify viable platforms with social impact and take control of them.  Women's sports are seen as a vehicle for public indoctrination, nothing more.

The reasons why they covet women's sports are varied, but a primary motive is the desire to assert the fallacy that men and women are "the same" psychologically as well as physically.  They want the deconstruction of biological sex and identity as nothing more than "social constructs" subject to personal preference.  If they can destroy what it means to be a man or a woman, they can destroy the very foundations of relationships, families and even procreation.  

For now it seems as though the trans agenda is hitting a wall with much of the public aware of it and less afraid to criticize it.  Social media companies might be able to silence some people, but they can't silence everyone.  However, there is still a significant threat as the movement continues to target children through the public education system and women's sports are not out of the woods yet.   

The ultimate solution is for women athletes around the world to organize and widely refuse to participate in any competitions in which biological men are allowed.  The only way to save women's sports is for women to be willing to end them, at least until institutions that put doctrine ahead of logic are made irrelevant.          

Tyler Durden Wed, 03/13/2024 - 17:20

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Part 1: Current State of the Housing Market; Overview for mid-March 2024

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024
A brief excerpt: This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to star…

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Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024

A brief excerpt:
This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to start with inventory, since inventory usually tells the tale!
...
Here is a graph of new listing from Realtor.com’s February 2024 Monthly Housing Market Trends Report showing new listings were up 11.3% year-over-year in February. This is still well below pre-pandemic levels. From Realtor.com:

However, providing a boost to overall inventory, sellers turned out in higher numbers this February as newly listed homes were 11.3% above last year’s levels. This marked the fourth month of increasing listing activity after a 17-month streak of decline.
Note the seasonality for new listings. December and January are seasonally the weakest months of the year for new listings, followed by February and November. New listings will be up year-over-year in 2024, but we will have to wait for the March and April data to see how close new listings are to normal levels.

There are always people that need to sell due to the so-called 3 D’s: Death, Divorce, and Disease. Also, in certain times, some homeowners will need to sell due to unemployment or excessive debt (neither is much of an issue right now).

And there are homeowners who want to sell for a number of reasons: upsizing (more babies), downsizing, moving for a new job, or moving to a nicer home or location (move-up buyers). It is some of the “want to sell” group that has been locked in with the golden handcuffs over the last couple of years, since it is financially difficult to move when your current mortgage rate is around 3%, and your new mortgage rate will be in the 6 1/2% to 7% range.

But time is a factor for this “want to sell” group, and eventually some of them will take the plunge. That is probably why we are seeing more new listings now.
There is much more in the article.

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