Wal-Mart Stores Inc (NYSE:WMT) shares are having a banner year.
The retail superpower broke out of a two-year slump from 2015 to 2016 to have its best year since 1999 in 2017. Not since the dotcom bubble days have Walmart shares seen a 30% yearly gain, and as CNBC notes, Stacey Gilbert, head of derivatives strategy at Susquehanna, thinks there’s more upside ahead after WMT’s earnings report today:
“From a trading sentiment heading into earnings, it’s an implied move of around 4 percent,” she said Friday on CNBC’s “Power Lunch.” “Nothing crazy, but the sentiment is really suggesting that there isn’t expected to be anything crazy mentioned and downside is likely limited.”
Gilbert believes the company’s fundamentals will continue to improve. “Management has done a great job of balancing the growth of earnings as well as all of the investments needed to let it continue to be a premium U.S. leading omnichannel retailer,” she added.
The key to Walmart’s growth has been heavy investment in its online business. The company acquired Jet.com recently, and rapidly expanded its third party merchant platform. It’s also striking key deals with other companies in the space in an effort to shed Walmart’s dowdy image.
There’s still a long way to go to catch Amazon, but Walmart’s combination of brick-and-mortar and e-commerce businesses is proving very successful. Investors have been flocking to the stock this year as a result, and it’s reasonable to conclude the gains will continue well into 2018.
Wal-Mart Stores Inc shares rose $4.95 (+5.51%) in morning trading Thursday. Year-to-date, WMT has gained 40.40%, versus a 16.82% rise in the benchmark S&P 500 index during the same period.