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Walmart Among Big-Box Retailers That May Miss Comparable Sales Expectations, RBC Says

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Walmart Among Big-Box Retailers That May Miss Comparable Sales Expectations, RBC Says

Major US retailers such as Walmart (WMT) will likely miss consensus expectations for second-quarter comparable sales, though Target (TGT) is seen delivering a beat, RBC Capital Markets said in a Wednesday note.

Home Depot (HD) is scheduled to release its results Aug. 18, followed by Target and Lowe's (LOW) on Aug. 19. Walmart reports Aug. 20.

For the second quarter, RBC raised Home Depot's same-store sales growth expectations to 0.7% from 0.2%, lower than Wall Street's 1% consensus. RBC cut estimates for Lowe's to show a flat performance, compared with a 0.5% rise previously penciled in. Analysts expect a 0.7% increase at Lowe's.

RBC left its estimates for Walmart's US operations unchanged, having trimmed projections in July to 3.5% from 4%, versus the 3.8% market view.

Target's comparable sales growth outlook moved higher to 3% from 2%, exceeding the consensus estimate of 2.2%.

RBC raised Home Depot's price target to $343 from $340, citing stable housing trends, market share gains and easy compares in the second half. "We remain sector perform as we continue to struggle with the catalyst for improved housing turnover, which is likely to keep (earnings per share) growth muted," RBC analyst Steven Shemesh said.

Home Depot said Wednesday that Chief Executive Ted Decker is taking a temporary medical leave of absence. Ann-Marie Campbell, senior executive vice president, will oversee the home improvement retailer's day-to-day operations, while Chief Financial Officer Richard McPhail will provide oversight of the company's financial management and Pro subsidiaries.

RBC pointed to softness in the do-it-yourself segment at Lowe's, whose price target slipped to $231 from $232. "We'd argue that the low-end of (2026) guidance now feels more likely," Shemesh said.

The brokerage kept Walmart's price target unchanged at $137.

RBC increased Target's price target to $166 from $153, saying its full-year adjusted EPS guide could be raised to around $8.20 to $8.80, versus market expectations of $8.48.

"While we're encouraged by the progress being made at (Target), we think a beat/raise is already embedded in shares and as such would argue the bar for outperformance on the print is very high," Shemesh said. "We believe reinvestment and advertising momentum should drive modestly better comp in (the second half)."

Price: $153.60, Change: $+2.47, Percent Change: +1.63%

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