Why Is Walmart Stock Rising?



Walmart crafted new 52-week high

As we discussed earlier, Walmart (WMT) stock has risen ~15.5% since the beginning of the year. Walmart stock outperformed the S&P 500 (SPX) and the Consumer Staples Select Sector SPDR Fund (XLP) in terms of stock price gains. A strong start to the current fiscal year. Improving fundamentals and the company’s latest announcement of the home delivery service boosted the stock to a new 52-week high of $79.81 on June 1, 2017.

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What drives Walmart stock higher?

Walmart stock rose ~6.2% after the company posted better-than-expected fiscal 1Q18 results on May 18. The company exceeded analysts’ EPS (earnings per share) estimate and marked the first EPS growth in more than two years. Notably, Walmart reported the tenth consecutive quarter of positive comparable traffic.

Following the company’s solid start to the current fiscal year, several brokerage firms covering Walmart raised their target price on the stock. Walmart’s value pricing, store remodeling, and expansion of online offerings worked for the company by driving store traffic and accelerating sales growth.

On June 1, 2017, Walmart stock closed at $79.81—almost at par with analysts’ 12-month target price of $79.94. In comparison, Costco (COST) also delivered strong returns driven by healthy comps growth amid a challenging landscape. Costco stock has risen 17.4% on a year-to-date basis. Meanwhile, rival Target (TGT) is struggling to drive growth—reflected in a 22.9% fall in its share price.


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