Goldman Sachs Adds Walmart Stock to "Conviction Buy" List

Analyst were already bullish on WMT coming into today

Deputy Editor
Oct 19, 2021 at 9:42 AM
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The shares of Walmart Inc (NYSE:WMT) are up 2.1% at $144.67 this morning after Goldman Sachs added the blue-chip retailer to its "Conviction Buy" list, replacing competing retailer Target (TGT). The firm sees potential for Walmart to improve its profitability in 2022, thanks to continued investments and ability to grow earnings before interest and taxes (EBIT) dollars.

Goldman Sachs' sentiment reflects an already bullish brokerage bunch, as 15 of the 19 analysts in coverage rated Walmart stock a "buy" or better, coming into today. Plus, the 12-month consensus target price of $169.16 is a hefty 17% premium to current levels.

The options pits, meanwhile, lean bearish, meaning a shift in sentiment amongst these traders could create additional tailwinds for WMT. This is per the equity's Schaeffer's put/call open interest ratio (SOIR), which sits higher than 97% of readings from the past year, indicating short-term options traders have rarely been more put-biased. 

Now may be an ideal time to bet on Walmart stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 19% sits in the 24th percentile of readings from the past year. This means options players are currently pricing in lower-than-usual volatility expectations. 

Thanks to this morning's positive price action, WMT looks ready to topple a recent ceiling at its 120-day moving average for the first time in nearly a month. The security is also set to overcome pressure at its year-to-date breakeven mark as it eyes its fourth-consecutive daily pop. 

 

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