March 2-Walmart

WMT

Option: June 18 Call, $150 Strike $1.60

Walmart has been in the doghouse for last couple weeks after reporting earnings and missing analyst(s) earnings per share. This is a great opportunity to capitalize on a business that is emerging as a contender in the e-commerce arena and possibly banking. In recent news, Walmart has nabbed two Goldman Sachs bankers from the consumer banking division. The move positions them to get into the financial services business to possibly serve the massive Walmart consumer base, providing new revenue streams in future. 

 

Just to recap some of the highlights of Walmart's latest earnings:

-Record revenue of 152.1 billion, up 10.4 billion

-E-commerce sales in U.S grew by 69% and same-store sales grew by 8.6%

-International sales were $34.9 billion up 5.5%

-Sam's Club sales up 10.8% and their e-commerce grew 47%

-Membership income increased 12.9%, the strongest growth in 6 years

-Investments in e-commerce and automation 

 

Bullish Developments:

-Removed 35$ order minimum for online

-Finance recruits from Goldman Sachs provide roadmap to consumer financing

-Partnership with e-commerce software company, BigCommerce to help ease the process of on-boarding new merchants

-Invested close to $14 billion to automate supply chain capacity

-Customers adoption of digital transformation should help Walmart continue to dig into Amazon's customers, especially with no order minimum

 -Washington is close to finalizing a lofty 1.5T+ stimulus package, where WMT is likely to benefit from spending of the stimulus

Analysts consensus $162.20 (23.47% upside) as of 3/1/21