Walmart is Ready to Weather the Storm Says Analyst

Walmart also said it would extend its free at-home returns beyond the holidays

Digital Content Manager
Dec 21, 2020 at 10:49 AM
facebook twitter linkedin


Walmart Inc (NYSE:WMT) is following today's broad-market trend, though some of these losses are likely being pared by a bull note from RBC this morning. The analyst lifted its price target to $170 from $153 and upgraded the security to "outperform" from "sector perform." RBC said Walmart is well positioned to perform well in a more challenged environment, as well as a recovering post-vaccine scenario. Separately, the company just announced a free at-home return option, which it will extend beyond the holiday season in an effort to compete with Amazon (AMZN). At last check, WMT is down 0.3% at $145.43. 

The equity has been on a downward pattern since touching its all-time high of $153.66 on Dec. 1. While WMT has lost nearly 5% this month, the stock still boats a 22.3% year-to-date lead, and it appears as if the $144 level is holding out at a floor on the charts. Along with the two bull signals flashing on the charts, it also looks like Walmart stock is testing support at the 60-day moving average, which helped capture a pullback in late October. 

Coming into today, the majority of  analysts were optimistic on the stock, with 17 calling it a "buy" or better. There were still some holdouts, however. Six still call the stock a "hold" or worse. Meanwhile, the 12-month consensus price target of $162.28 is an 11.8% premium to current levels. 

Options players have been a bit more bearish than usual. Though calls still outnumber puts on an overall basis, the equity's 10-day put/call volume ratio of 0.33 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 63% of readings from the past year. This implies a healthier-than-usual appetite for long puts of late. 

A look at today's trading shows 24,000 calls and 5,375 puts across the tape so far -- 1.3 times the intraday average. The most popular position by far is the weekly 12/24 147-strike call, where it looks like contracts are being bought to open, indicating that these traders expect the underlying stock to stay below the $147 mark until these contracts expire on Christmas Eve. 

 

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners