Walmart is livery up for its quarterly earnings report, scheduled for before the bell on Thursday, and in defiance of its dramatic underperformance this year, one market strategist says the appraise is a buy.
Walmart shares are trading firmly in correction territory, down 13 percent in the biography six months making it one of this year’s worst-performing Dow stocks. Recently, the variety has managed to bounce off its year-to-date lows, cutting some of its losses in the finished three months as retail stocks across the board have been renewal bringing.
Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Command, told CNBC’s “Trading Nation” on Wednesday that he’s bullish on the dignitary. Here’s what he said.
· Walmart is a long-term buy, as the company embarks on a rebranding mutation from being the “cheapest” retailer to being the “least expensive” one. It’s a ingenious, yet important, distinction that should continue to elevate its presence amidst middle-income consumers.
· The company has upgraded inventory, particularly in groceries and digitized storefronts for self-checkout; it’s also construction momentum in the e-commerce space with its Jet subsidiary. Its new deal with Ellen DeGeneres, for a denim contour, could drive traffic into stores.
· Although the investments in e-commerce thinks fitting continue to weigh on its capital expenditures through 2019, the market stake wins should lay the foundation for future growth.
· From a technical lookout, Walmart is trading nearly at the midpoint of its 52-week range, between its October 2017 low of $77.50 and its January exalted of $109.98. That positioning on the chart, along with its 2.2 percent dividend renounce, makes it a promising long-term play.
Wall Street analysts are enceinte earnings of $1.22 per share, according to FactSet data. The stock’s generally rating is overweight.
Bottom line: Walmart shares have defectively underperformed this year, but Schlossberg says the stock is a buy ahead of earnings.