Whisper Number: How Will Wal-Mart’s Stock Move After Earnings?
Wal-Mart (NYSE:WMT) is expected to report earnings on Thursday, May 15. The whisper number is $1.15, in-line with the analysts’ estimate and showing neutral confidence from investors. Whispers range from a low of $1.12 to a high of $1.17. Wal-Mart has a 51 percent positive surprise history (having topped the whisper in 25 of the 49 earnings reports for which we have data).
- Beat whisper: 25 qtrs
- Met whisper: 2 qtrs
- Missed whisper: 22 qtrs
Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.
The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:
The strongest price movement of -2.2 percent comes within thirty trading days when the company reports earnings that beat the whisper number, and -1.5 percent within twenty trading days when the company reports earnings that miss the whisper number. While the strongest price moves are negative, the overall average price move is ‘as expected’ (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.