FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
30,449,105Confirmed
951,682Deaths
22,145,763Recovered
Fetching Location Data…
Advertisement
Advertisement
Alan Farley
Walmart

Dow component Walmart Inc. (WMT) rallied nearly 7% in Wednesday’s U.S. session after a Recode report alleged the retail giant will launch a premium delivery service that competes head-to-head with rival Amazon. Com Inc. (AMZN). If confirmed, the Walmart+ service will launch later this month, adding to online market share that’s been growing at a torrid pace since 2016, when the company acquired Jet.Com.

Walmart Pandemic Sales Surge

Walmart rocketed higher in March, picking up brick and mortar sales from hundreds of smaller retailers forced to close down as a result of the pandemic.  Online sales boomed as well in the first quarter, posting a phenomenal 74% year-over-year growth rate, underpinned by millions of folks forced to surf the web to buy household essentials. The stock posted an all-time high in April but price action has been sluggish in the last three months, with market players reallocating their buying power to reopening plays.

UBS analyst Michael Lasser upgraded the stock in June, citing bullish earnings expectations as a result of an “enhanced productivity loop, e-commerce scale, and accelerated technology deployment.” He wrapped up his upbeat report, noting that Walmart “offers the prospect of best-in-class consistency in an uncertain environment. We believe these elements will enable WMT shares to maintain a premium multiple, especially as the gap between the leaders and laggards in retail widens.”

Advertisement

Wall Street And Technical Outlook

Wall Street consensus translates into a “Strong Buy” recommendation, with 19 ‘Buy’, and 4 ‘Hold’ ratings. No analysts are recommending that shareholders sell the stock at this time. Price targets currently range from a low of $120 to a street high $150 while the stock is now trading about $13 below the median $138 target. This bullish placement bodes well for continued gains in the third and fourth quarters.

Heavy second quarter selling pressure mars an otherwise bullish technical outlook. Walmart pulled back about 16 points off the April peak into June, where it carved a small basing pattern that’s now acting as a platform for higher prices.  However, accumulation-distribution readings fell to a 15-month low at the same time and the stock will need to find new sponsorship to power a sustained uptrend toward 150. As a result, sidelined investors may wish to wait for a breakout above the April high at 133.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Trade With A Regulated Broker

  • Your capital is at risk