Walmart Inc. (WMT) shares rose more than 1% during Monday's session after UBS upgraded the stock to Buy with a $135 price target, reflecting a 13% premium to Friday's close. UBS analyst Michael Lasser is bullish on the retailer's enhanced productivity loop, increased e-commerce scale, and accelerated technology deployment. He's also bullish on Walmart's health care ambitions, advertising traction, and success in key emerging markets such as India.
Guggenheim analyst Robert Drbul also raised his price target from $140 to $145 while reiterating his Buy rating. The analyst remains comfortable with an above-consensus EPS estimate following six bi-monthly surveys. Moreover, he believes that Walmart's omni-channel strategy will produce solid growth.
Walmart shares outperformed the S&P 500 since the beginning of the pandemic, serving as a safe haven of sorts when investor anxiety is on the rise. While it hasn't benefited as much as Amazon.com, Inc. (AMZN) or other online-only retailers, the pandemic has boosted Walmart's online presence moving forward.
From a technical standpoint, the stock rebounded from its 200-day moving average at $118.18 toward its 50-day moving average at $124.03. The relative strength index (RSI) moved to neutral levels of 48.69, while the moving average convergence divergence (MACD) could see a near-term bullish crossover. These indicators suggest that the stock could have more room to run over the coming sessions.
Traders should watch for a move toward the 50-day moving average at $124.03 over the coming sessions with support at the 200-day moving average at $118.18. If the stock breaks out, traders could see a move toward prior highs of around $132.50. If the stock breaks down, traders could see a move toward reaction lows of around $107.50, although that appears less likely to occur given the bullish sentiment.
The author holds no position in the stock(s) mentioned except through passively managed index funds.