Analyst: Blue-Chip Retailer Set to Regain Market Share

Options bulls are chiming in after today's bull note

Digital Content Manager
Mar 30, 2023 at 10:43 AM
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Walmart Inc (NYSE:WMT) stock is up 0.9% to trade at $145.54 at last check, after Evercore upgraded the retail giant to "outperform" from "in line," while also raising its price target to $160 from $145. The analyst in coverage noted Walmart may regain market share and see more traffic, in addition to better margins, in the next two years. The brokerage also praised the company's diligence in divesting from non-core assets while investing in supply chain productivity.

Options bulls are already chiming in, with 16,000 calls exchange so far -- triple the intraday average -- compared to just 4,373 puts. The most popular contract is the weekly 3/31 147-strike call, where positions are currently being bought to open.

Short-term options traders have been more put-biased than usual. This is per WMT's Schaeffer's put/call open interest ratio (SOIR) of 1.01, which ranks higher than 71% of annual readings. Should this pessimism continue to unwind, Walmart stock may surge higher still.

WMT is seeing well-priced premiums at the moment. The stock's Schaeffer's Volatility Index (SVI) of 19% stands higher than just 13% of all other readings from the past 12 months, implying that options players are pricing in low volatility expectations at the moment. 

Walmart stock has staged a nifty little bounce off its 200-day moving average, and today is on track for its highest close since Feb. 21. A ceiling at the $148 level -- which has capped several rally attempts since mid-December -- still looms overhead, though. In the last nine months, WMT has added 19.9%.


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