Earnings season: Will Wal-Mart Stores deliver 8% EPS growth?

The earnings season is a done deal and the battles for market direction are now fought on Europe's bond market fields with Italy being the key here.

Nevertheless, two big U.S. household names, Wal-Mart Stores and Home Depot, are on tap next week and expectations are for an earnings growth of 8.3 and 14.3 percent respectively. It sounds like high earnings growth rates but when you compare it to the average 15.1 percent growth rate among S&P 500 companies so far (see chart below for earnings growth in S&P 500 on sector level) in the current earnings season they are not impressive.

Source: Bloomberg and Saxo Bank Strategy & Research

However the key difference is that Wal-Mart is the largest company in the world measured by revenue and in that perspective an 8.3 percent growth rate is indeed very good. Can it deliver the growth rate expected by analysts? With recent data coming in from the U.S. and especially retail sales figures we are quite positive that Wal-Mart will meet expectations. Also Wal-Mart's earnings release is worth looking at as it gives a good insight into consumer demand and inflation pressures on consumer products.

You see next week's earnings releases including expectations here.