By Steven Russolillo

Someone threw a postelection party and forgot to invite Wal-Mart Stores Inc.

As the major stock indexes rallied sharply after Donald Trump's surprise victory, retail and supermarket stocks were among the biggest winners. Whole Foods Inc., Supervalu Inc. and Kroger Co. all jumped. Macy's Inc. and Kohl's Corp. notched double-digit percentage gains. Target Corp. on Wednesday was on track for its biggest one-day increase since 2009.

Wal-Mart has been conspicuously absent.

The world's largest retailer has underperformed the Dow Jones Industrial Averagesince the election. And while an upbeat earnings report Thursday could help close the gap, any further upside seems limited. Analysts polled by FactSet forecast estimate third-quarter earnings of 96 cents a share, down from $1.03 a year earlier. Revenue for the period is expected to log an uptick of just 1% to $118.6 billion.

Mr. Trump has advocated for lower taxes, less regulation and more fiscal spending, which in theory should juice the economy and has helped stoke the broad market rally. But Wal-Mart is known for beating the market during tough times. It was one of the few blue chips that rose in 2008 thanks to its defensive characteristics. Today, American consumers are loosening their purse strings. U.S. retail sales have had their best two-month performance in at least two years, according to government data released this week.

Furthermore, potential friction with Mexico and a tumble in that country's currency may hurt. Wal-Mart has 2,373 stores in Mexico, roughly 20% of its locations.

Meanwhile, Wal-Mart's bottom line has been pressured by heavy spending on higher wages, store improvements and building out its e-commerce operations. It acquired Jet.com earlier this year for $3.3 billion, the largest purchase ever of an e-commerce startup.

And in October, Wal-Mart offered a muted earnings outlook for its next fiscal year, saying it expects earnings to be flat from the prior year. It expects to slow new store openings as it focuses more on digital.

Even after missing out on the postelection rally, Wal-Mart shares are still up about 17% for the year, more than double the Dow and S&P 500. Fetching 16 times projected earnings, the stock isn't much of a bargain.

Whether other retailers have much to celebrate is an open question, it isn't Wal-Mart's type of crowd anyway.

(END) Dow Jones Newswires

November 16, 2016 14:38 ET (19:38 GMT)

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