Walmart Posts Record Surge in Q2 Online Sales; Buy with Target Price $150

Walmart Inc, an American multinational retail corporation that operates a chain of hypermarkets, said its total revenue increased 5.6% in the second quarter to $137.7 billion and posted its biggest growth in online sales as buyers purchased everything from the comfort of their homes amid COVID-19 pandemic.

The world’s largest company by revenue said its U.S. sales increased 9.3%, led by strength in general merchandise and food and U.S. eCommerce sales grew 97% with strong results across all channels. Growth in membership income was the highest quarterly increase in more than five years. New member count increased by more than 60%.

“We like Wal-Mart’s global scale, extensive international growth opportunity, increasing focus on e-commerce and smaller Neighborhood Markets, and the company’s status as a large-cap defensive stock,” said Oliver Chen, equity analyst at Cowen.

“We believe improving US comps and the health of the US consumer are key positives for the stock and believe top-line momentum is set to continue in FY21 & FY22 driven by price investments and an improved store experience. We rate WMT Outperform with a $155 price target on ~28x our FY22 EPS of $5.50E,” Chen added.

The company said its operating income rose 8.5% to $6.1 billion in the quarter, while adjusted earnings per share of $1.56.

However, Walmart said its international net sales were $27.2 billion, a decrease of 6.8% as volatile currency rates negatively affected net sales by approximately $2.4 billion. The company’s net sales and operating results were significantly affected by a continuation of the global health crisis.

Walmart shares closed 0.6% lower at $134.7 on Tuesday, but it is up over 13% so far this year.

Walmart stock forecast

Twenty-two analysts forecast the average price in 12 months at $142.35 with a high forecast of $160.00 and a low forecast of $130.00. The average price target represents a 5.67% increase from the last price of $134.71. From those 22, 16 analysts rated “Buy”, six rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley target price is $150 with a high of $240 under a bull scenario and $95 under the worst-case scenario. D.A. Davidson raised the price target to $154 from $148 and RBC raised it to $137 from $132.

Other equity analysts also recently updated their stock outlook. Keybanc raised the price target to $150 from $138, Raymond James upped the price objective to $145 from $140, Jefferies increased it to $157 from $151 and Stifel upgraded it to $130 from $125.

We think it is good to buy at the current level and target $150 as 50-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

Analyst view

“We expect Walmart to sustain recent momentum in its core business in F’21/F’22 and see a growing ability to balance longer-term investments with near-term returns. Our OW rating and $150 PT are underpinned by a preference for 1) quality players with scale and 2) defensive retailers in the current COVID-19 environment,” said Simeon Gutman, equity analyst at Morgan Stanley.

“We think the launch of Walmart+ could serve as a sustainable positive tailwind for the stock (assuming the program benefits are made clear through disclosure of subscriber numbers or higher sales growth). In our base case we have estimated up to 20 million members may be willing to sign up for Walmart+ within six months of launch (per our AlphaWise survey data). Assuming a 1.7x spending uplift for existing Walmart shoppers that sign up for the program and breakeven e-commerce operations by the fifth year of membership yields $30 billion of NPV for Walmart ($10/share).”

Upside and Downside risks

Upside: 1) Comps accelerate to +MSD-HSD led by continued Grocery strength. 2) Sustainable US e-comm growth of 50-60%+ behind Click & Collect momentum. 3) PhonePe gains wider market appreciation, driving incremental multiple expansion. 4) Walmart+ gains more traction than expected – highlighted by Morgan Stanley.

Downside: 1) E-commerce loses begin to rise again after briefly moderating. 2) US e-comm growth slows to <30% (comps <2%). 3) Greater than expected Flipkart losses.

E-mini S&P 500 Index (ES) Futures Technical Analysis – Needs to Close Over 3379.75 to Sustain Rally

September E-mini S&P 500 Index futures are expected to open higher based on the pre-market trade. Supporting the rally are bullish earnings reports from Home Depot and Walmart, which are setting an upbeat tone ahead of the cash market opening.

The benchmark futures contract hit a record high during Asian trading hours but later lost steam as caution over a Sino-U.S. spat grew after President Donald Trump announced further restrictions on tech giant Huawei Technologies Co.

At 12:07 GMT, September E-mini S&P 500 Index futures are trading 3384.25, up 4.50 or +0.13%.

Home Depot rose 2.8% in the premarket, putting it in a position to set a record high. Wal Mart shares shot higher by 5.5% in premarket trading.

In other news, retailer Kohl’s lost 25 cents per share for its latest quarter, smaller than the 83 cents a share loss that Wall Street analysts had anticipated. Auto parts retailer Advance Auto Parts earned $2.92 per share for the second quarter, well above the $1.98 a share consensus estimate.

Daily September E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out the last high at 3382.50 earlier in the session.

The main trend is safe for now. It will change to down on a move through 3195.00. This is highly unlikely, but due to the prolonged move up in terms of price and time, the index remains inside the window of time for a potentially bearish closing price reversal top.

The new minor range is 3319.50 to 3388.75. Its 50% level at 3354.00 is the nearest support. Look for the short-term upside bias to continue as long as this level holds. This level is dynamic so it will move up if the market continues to make higher-highs.

The short-term range is 3195.00 to 3388.75. The minor trend will change to down on a trade through 3319.50. If it does then momentum will shift to the downside with the retracement zone at 3291.75 to 3269.00 the next likely downside target.

Daily Swing Chart Technical Forecast

Given the early price action, the direction of the September E-mini S&P 500 Index on Tuesday is likely to be determined by trader reaction to 3379.75.

Bullish Scenario

Holding above 3379.75 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to make a run at the February 20 main top at 3396.50. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 3379.75 will signal the presence of sellers. This could trigger a break into the minor 50% level at 3354.00.

A close below 3379.75 will form a closing price reversal top. If confirmed, this could trigger a 2 to 3 day correction.

For a look at all of today’s economic events, check out our economic calendar.

Healthcare Could Be Silver Bullet for Walmart in Long Term; Target $140: Morgan Stanley

Walmart Inc, an American multinational retail corporation that operates a chain of hypermarkets, has recently moved into the healthcare space with its own insurance business which could be a ‘silver bullet’ for the world’s largest retailer over the long-term, according to Morgan Stanley.

Walmart on July 8 revealed that it has created an insurance company named ‘Walmart Insurance Services LLC’ to sell Medicare insurance with its groceries and clothing, starting from August.

“There is scant detail around Walmart’s overarching health strategy aside from the fact that it wants to improve access to, and reduce the costs of, healthcare in the US. From that perspective, a multi-pronged approach makes a lot of sense and recent steps are clear indications this is what Walmart is pursuing. We don’t know if/how Walmart plans to directly monetize CareZone, or the details of its pricing/distribution strategy in relation to selling health insurance,” Morgan Stanley’s analysts wrote.

In June, Walmart bought CareZone’s medication management technology and intellectual property, in a move to strengthen its digital health presence. The largest retail corporation owns four health centres in the United States, which provides counselling and dental care to its customers at a low price – annual checkup for $30 or a strep test for $20.

“These two initiatives are certainly going to be immaterial to Walmart’s P&L in the near- to medium-term. However, its huge customer base and a gigantic market opportunity to reduce inefficiencies make Walmart’s deeper foray into healthcare sensible, in our view. We expect to see its suite of initiatives grow over time,” analysts added

Morgan Stanley target price is $140 with a high of $180 under a bull scenario and $100 under the worst-case scenario.

“Comps accelerate to +MSD-HSD led by continued Grocery strength. Sustainable U.S. e-comm growth of 50-60%+ behind click & collect momentum and traction with long-tail assortment. PhonePe gains wider market appreciation, driving incremental multiple expansion,” Morgan Stanley highlighted as upside risks to Walmart.

“E-commerce losses begin to rise again after briefly moderating. U.S. e-comm growth slows to <30% (comps <2%). Greater than expected Flipkart losses,” Morgan Stanley highlighted as downside risks to the world’s largest retailer.

Twenty-three analysts forecast the average price in 12 months at $138.15 with a high forecast of $150.00 and a low forecast of $120.00. The average price target represents an 8.14% increase from the last price of $127.75, according to Tipranks. From those 23, 19 analysts rated ‘Buy’, four analysts rated ‘Hold’, and none rated ‘Sell’.

“As the lines between Retail, Healthcare & Tech blur, WMT’s growing suite of initiatives make it a sleeping giant to watch,” analysts added.

Walmart Premium Service Could Ignite Buying Interest

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.”

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.

S&P 500 Earnings Preview – Walmart and Home Depot Headline Tuesday’s Earnings Releases

There are several large retail giants scheduled to release financial results this week. Tuesday will see some of the biggest retailers kick off the week.


Walmart (WMT) is scheduled to release financial results on Tuesday, May 19. The retail giant is expected to report earnings of $1.17 per share on 130.31 billion in revenue.  This compares to 1.43 per share in the quarter prior. Earnings forecasts are unchanged over the last 30-days, which is a positive sign given the recent declines in most forecasts. Growth estimates are expected to increase by 3.5%. The company reported in April that Alcohol sales increased 350% year over year and grocery sales were up more than 30% year over year.

The stock price is approximately $5 per share off the all-time highs, and a beat will likely propel the retail giant to fresh highs.

Home Depot

Home Depot (HD) the home improvements conglomerate is scheduled to release financial results on Tuesday, May 19. The company is expected to earn $2.26 per share on $27.38 billion in revenue. This compares to $2.1 in earnings in the quarter prior. Analyst forecasts of earnings have declined $0.03 during the past 30-days. Growth estimates are for a decline of less than 1%.

The stock price broke out to fresh all-time highs just before the earnings release. With home prices remaining at elevated levels, the stock should continue to benefit from robust revenues rising as the trend pushes higher.


Kohl’s (KSS) is expected to release financial results on Tuesday, May 19. The company is expected to earn -$1.75 per share on $2.16 billion in revenues. This compares to $2.88 in earning in the prior quarter. Earnings forecasts have declined by more than $1.02 per share over the last 30-days.

Most of Kohl’s stores were closed during the “shelter in place” orders. Its customers are generally middle-income customers, that have lost jobs over the past 8-weeks. The shares are unlikely to see a positive upside until a vaccine is released.

Global Crisis: Time to Enter the Market

If fundamentals stay as they are, we are likely to see the market gradually recover its losses, half of which are already reconquered. That makes this moment attractive to buy stocks. If we witness this moment, it will be the perfect timing to buy stocks. All you need is to choose a suitable trading platform. FBS Trader offers low spreads and fast deposits and withdrawals. So, why not? You can consider the following notable performers.


Strategically, Disney’s stock was rising in value before the virus came. The company also launched its Disney+ streaming service at the end of 2019, which made the price surge even higher – to the all-time high of $150. Therefore, it has all the fundamentals to rise when the virus outbreak is finally over. Paying $100 now for something that used to cost $150 is a rare discount. You can take this chance and buy or sell Disney’s stock in new and innovative app from FBS. In the short term, look at $120 per share as the resistance to be tested and probably broken.


Walmart is on the list because of its strong fundamentals and a huge discount. Walmart is here for the same reason. At the same time, there’s more to this stock: although at a discounted price, it didn’t fall as much as most of its peers did. In fact, it’s one of the few shares that proves to be quite resilient to the virus-led plunge. Therefore, it makes sense to look at the current price and think of buying one of the strongest market performers that was traded at $125 a couple of months ago. With the pending order feature in the FBS Trader app, you can profitably buy stocks and select at which price level a position should be opened.


NVIDIA is interesting because it represents the foremost frontier of the progress: virtual reality, video games, cloud technologies, etc. After the company sorted out its problems in 2018, it went into steady growth. There are reasons to expect that it will keep the line after the virus is gone. Now at $244, it is down 24% from its recent record – a significant discount for this share. The logic to take it is “buy the future”. And it is possible with FBS Trader app, which offers essential features for trading, such as instant deposits and withdrawals within over 100 payment systems.


Don’t be surprised to see Coca-Cola here. Actually, never be surprised to see it under any circumstances – it is one of the few century-old stocks that survived wars and pandemics and will survive us. If you like the logic “if Warren Buffett has it, I will have it”, you should like this stock. The price of $41 is offered for a $60-worth stock in March. Fortunately, FBS Trader provides you with online access to trading worldwide – anywhere and anytime. You can use the chance to buy Coca-Cola stocks at the time that suits you best.


Payment processing will recover before other industries wake up. This stock looks especially good as Chinese authorities allowed Mastercard to establish clearing services in China, and China is already on the way out of the virus-oppressed state. Mastercard looked strong before, it looks strong now, and trades at $256 after $347 – an offer one cannot lose, especially when you have the app for traders that opens up new opportunities.


UK Down On Brexit Woe, Pound Sinks, Asian Up On Brexit Hope, US Dollar Moves Higher

Asian Markets Move Broadly Higher On Brexit Hopes

Asia, led by China, moved broadly higher in Thursday trading, extending a bounce that began earlier in the wee. The Hong Kong-based Heng Seng led advancing indices with a gain of 1.75% followed by a 1.36% gain for the Shang Hai Composite. The Korean Kospi advanced nearly 1.0% on word a draft-Brexit had been written while the Australian ASX and Japanese Nikkei closed closer to break-even. The Japanese Nikkei was Thursday’s laggard posting a loss near -0.20%.

China’s equity markets were also supported by word the Chinese government had sent a written response to Washington’s demands. The details of the letter are not yet known but the sentiment is positive in light of the recently reduced tension between the US and China. Chinese President Xi Jinping and US President Donald Trump are slated to meet at the G-20 Summit in order to discuss improving trade relations.

EU, UK Down On Brexit Resignations

The UK and EU markets were initially higher on easing fear a hard-Brexit was inevitable. Those fears came back to the forefront soon after the open and reduced gains to near 0.25% for the FTSE 100 and Xetra DAX by midmorning. The CAC was the laggard posting mid-morning a loss of -0.20%.

In the UK, tensions over the draft-Brexit have split Theresa May’s parliament resulting in the resignations of several key members including the Brexit Secretary Dominic Raab. Raab says he can not support the current Brexit plan in light of promises made to the British people by ruling party members before the referendum was taken. The Brexit news had a negative impact on the pound. The GBP/USD and EUR/GBP both shed nearly -1.50% on the news.

US Markets Brace For Data, Dollar Moves Higher

The US futures market was indicating a positive open for equity indices in the early hours of the morning. Traders wary of geopolitical events were focused on a raft of economic data that produced a mixed bag of results. After the 8:30 AM data deluge futures pared their gains to indicate an open near break-even.

Retail sales figures came in hotter than expected at 0.80%. This is 0.3% hotter than expected and points to continued strength in the consumer. On the manufacturing front, the Philly Fed’s MBOS fell nearly 10 points to 12.9, far below expectations, on weakness in New Orders. The Empire State Manufacturing Survey counterbalanced MBOS by advancing 2.0 points to 23.3 in evidence of expanding activity in the New York Federal Reserve District.

Earnings reported released before the open on Thursday were good but did not spark a rally in equities. Both WalMart and Cisco reported top and bottom line results that beat the analyst’s consensus and provided a positive outlook. Walmart rallied a little more than 1.0% on the news while Cisco advanced a more robust 4.0%. NVIDIA tops the list of companies reporting earnings after the bell on Thursday. The company is expected to post YOY gains but the result may be negatively impacted by weak sales of cryptocurrency mining chips.

Wal-Mart Stores Inc (NYSE:WMT)’s Q1 Results Beat Estimates As Online Sales Improve

In the previous quarter Walmart had a disappointing performance with regards to online sales in the United States but this time round revenues from the e-commerce operations grew by 33%, an indication that the investments the big box retailer has made in its website design and online grocery is paying off.

While Wall Street had been expecting earnings per share to come in at $1.12, the actual figure was $1.14. Thomson Reuters had been forecast revenue to amount to $120.51 but it instead came in at $122.69 billion.

“Online grocery continued to accelerate and [we] had the new site redesign late in the quarter. We also have new brands in e-commerce including the partnership with Lord & Taylor, so there are a lot of different things driving growth there,” said the Chief Financial Officer of Walmart, Brett Biggs, in a CNBC interview.

Increased optimism

Walmart is now optimistic about its e-commerce operations and expects to grow online sales by 40% for the entire year. The rebound in e-commerce follows a sharp slowdown which occurred over the crucial holiday quarter. This resulted in the shares of the online retail giant falling by more than 10% wiping out shaving off approximately $31 billion in market cap.

According to Marc Lore, Walmart’s e-commerce chief, the redesign of the website is estimated to have enhanced traffic to the big box retailer’s online grocery business by between 10% and 20%.

With regards to international operations sales grew by 4.5%. Currently Walmart is reorganizing its global business portfolio. In Walmart’s largest deal ever the retailer will buy a 77% stake in Flipkart, an Indian e-commerce firm, at a price of $16 billion. The world’s second most populous country boasts of 300 million millenials who are tech savvy and this makes it a highly lucrative market that is poised for growth. Walmart also intends to dispose of a majority interest in Asda Group, a grocery chain in the United Kingdom, to J Sainsbury.

Four straight years of growth

The big box retailer now boasts of four straight years during which it has enjoyed growth in the United States and this is a record no other retailer can match. While the rising gas prices may have reduced the purchasing power of some, Walmart indicated that it was still enjoying robust consumer demand. However consumer traffic growth during this year’s first quarter was lower than last year’s – in the first quarter of this year consumer traffic growth was 0.8% compared to last year’s 1.5%. This was attributed to the delayed spring which made customers consolidate trips. The delayed spring also hurt demand with regards to weather-related categories.

The growth of Walmart’s online grocery pickups is coming at a time when, Inc. (NASDAQ:AMZN) is making chess moves of its own. Just this week the online retail giant announced that when Prime members do their shopping at the outlets of Whole Foods Market, they will get special discounts. Amazon acquired Whole Foods Market last year.