Wal-Mart Stores Inc. (NYSE:WMT) Option Calls
Provides 384% Potential Profit
-- More To
by Ian Harvey
November 17, 2017
Wal-Mart Stores Inc. (NYSE:WMT)
Here is an update of Wal-Mart Stores Inc. (NYSE:WMT) winning options call trade after reporting earnings. This options trade was recommended, as a consideration, on Monday, November 13, 2017 -- in the article “Earnings Predictions for the Week Beginning November 13, 2017”-- producing excellent profits of 384% within a few days of executing the trade!
Wal-Mart Stores Inc. (NYSE:WMT) – will report before the market opens. The consensus earnings estimate is $0.97 per share on revenue of $121.06 billion but the Earnings Whisper number is $0.99 per share. Walmart has met or surpassed earnings estimates in eight straight quarters, and shares have gained about 30% in 2017.
Thanks to several key acquisitions and investments, Walmart's e-commerce business is gaining serious momentum and should be the focal point of its report.
Wal-Mart reiterated its profit forecast for fiscal 2018, including adjusted earnings per share of $4.30 to $4.40. The midpoint of that range would be up slightly from fiscal 2017's $4.32 in adjusted EPS.
Looking further ahead, Wal-Mart expects EPS growth of 5% in fiscal 2019, driven by a 3% rise in sales and new cost control measures.
Also, Wal-Mart's plans to repurchase $20 billion of its shares -- or about 7% of its current market cap -- over the next two years.
Investor sentiment going into the company's earnings release has 72% expecting an earnings beat. Overall earnings estimates have been revised higher since the company's last earnings release.
Option trade to consider: Buy the TGT DEC 15 2017 92.500 CALL at approximately $1.50.
A surging online
business and strong food sales boosted Walmart's results Thursday ahead of the
"Walmart's online performance continues to validate its substantial investments in this critical channel, including its purchase of Jet.com," Moody's lead retail analyst Charlie O'Shea said in a note.
Wal-Mart reported a 2% earnings-per-share gain in the third quarter, defying views for a 1% drop. Revenue growth accelerated to 4%: and U.S. online sales surged 50%.
Investors increasingly see Wal-Mart as a worthy rival to Amazon (AMZN). Wal-Mart has moved aggressively with acquisitions and initiatives to tackle Amazon head-on.
Walmart says its food business, critical to drawing shoppers into its stores, had the strongest quarterly performance in nearly six years.
Overall, Walmart posted quarterly revenue of $123.18 billion, surpassing Wall Street forecasts of $121.05 billion. Sales at stores open at least a year rose 2.7 percent for the U.S. division, the biggest gain since the first quarter of 2009. Customer counts rose 1.5 percent, and Walmart said shoppers added one extra item to their cart, which helped boost sales.
The company has been aggressively cutting prices and has overhauled its shipping strategy and is planning to double the number of store-curb pickup for groceries ordered online to 2,000 by next year. Rival Target is also testing store-curb pickup for online grocery orders at 50 stores in the Minneapolis area, but it's playing catch-up.
The Bentonville, Arkansas-based company earned $1.75 billion, or 58 cents per share, in the third quarter. Earnings adjusted to extinguish debt and for non-recurring costs came to $1 per share, beating the average estimate of 97 cents per share.
Walmart now expects full-year earnings of $4.38 to $4.46 per share, up from a forecast for $4.30 to $4.40 per share.
Wal-Mart shares surged 10.9% to 99.62 in Thursday's stock market trading . Shares were already well-extended from an 82.09 buy point cleared in early October. Wal-Mart stock has spiked 44% so far in 2017, making it one of the top performers on the Dow Jones industrial average.
At the time of the recommendation, Monday morning, WMT stock price was sitting at $91.58.
Thursday saw the stock price end the day at $99.62, up $ $9.79 or 10.90%.
So, for those traders who managed to execute this trade recommended by Stock Options Made Easy; a nice tidy potential profit of 384% within a few of days.
ACTION TO TAKE…….
As you would have by now realized, many of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but during earnings season this strategy has been very profitable.
Our approach is to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.Our proven track record says it all!!
Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.
What To Do Now…….
If you interested in being part of this profitable action just click here……