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Wal-Mart Stores, Inc. (WMT) Earnings on Thursday: A Buy Before, After or Never?

Wal-Mart Stores, Inc. (NYSE:WMT) will be declaring its second quarter earnings on Thursday and as usual the Street is expecting nothing spectacular from the company, though most believe that Wal-Mart Stores, Inc. (NYSE:WMT) will yet again disappoint. The company it seems has reached a saturation point from where it hasn’t been able to pull itself out since over a decade. Wal-Mart Stores, Inc. (NYSE:WMT) tried expanding to other countries, but all its attempts have been mostly unsuccessful. Should an investor put his money in Wal-Mart Stores, Inc.(NYSE:WMT)’s stocks before its earnings or is it better suited elsewhere?

That and the leadership of the company was the topic of discussion between Chad Morganlander from Stifel and Burt Flickinger from Strategic Resource Insight Group, on CNBC recently.

“In the long term, going at 3 to 5 years, we believe that this valuation makes sense, P/E multiple is trading at roughly at about 14 and a half times 2014, 13 and a half times 2015, trading at 11 times free cash flow. Expectations are washed out, revenue growth exceeds over 3%, then you can see the stock higher. Revenue growth of about 3 to 5% over the next would put this stock perhaps at a total return of around 8%, over the course of that time period,” Morganlander said.

Wal-Mart Stores, Inc. (WMT)

Burt Flickinger is of the view that Wal-Mart Stores, Inc. (NYSE:WMT) is really struggling with its international expansions, as is evident from the company’s recent struggles in Africa, South America and Asia. Flickinger also believes that Wal-Mart Stores, Inc. (NYSE:WMT)’s cash flow is good, but the company is in a ‘value trap’ because Wal-Mart Stores, Inc. (NYSE:WMT) doesn’t have a great leadership to execute its international expansions successfully. He also gave advice to investors that they should run away from retail stocks except those companies that sell luxury products or category specific products.

“[…] The quarterly numbers will come out, they probably will be below expectations, the stock would probably trade down 3 to 5%, but that will probably be a good time for investors to take a position in the company,” Morganlander added.

Disclosure: None

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