Traders Should Try to Buy This Stock at $78 for a Trading Target of $88

Wal-Mart Stores Inc (NYSE:WMT) — This, the largest retailer in the world with over 10,000 discount department stores, wholesale clubs, supermarkets and supercenters, has successfully fought to maintain its position in a highly competitive environment.

Last Thursday, CFRA (S&P Global) issued a stock report in which it kept a “Five-Star Strong Buy” rating on the stock while increasing the 12-month target to $87 from $81 and their fiscal year 2018 (Jan.) earnings per share to $4.36, up from $4.30.

The increase was the result of WMT’s April quarterly result of $1, which beat S&P’s estimate by 5 cents.

They pointed out that comparable store sales growth of 1.4% was driven mainly by food sales and “U.S. e-commerce sales growth of 63% was driven by a 5X increase in assortment and faster delivery offering.”

In October 2015, the board approved a $20 billion share buyback plan.

As of May ’17 $7 billion remained to be completed. WMT pays an annual dividend of $2.04 for a dividend yield of 2.6%.

Early in April, WMT stock broke a 10-month resistance line at $73, advancing to about $77 before retreating to about $75 last Wednesday. Several major research firms increased both earnings and price targets, and on Thursday the stock broke to a new high, which was followed by another advance on Friday.

WMT stock is, however, still shy of its all-time high of $91 made in January ’15 but appears destined to test that high. Thus traders should try to buy this blue-chip member of the Dow Jones Industrial Average at $78 for a target of $88 and a proposed return of almost 13%.

– Sam Collins, Trade of the Day

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Source: Investor Place



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