Telsey Raises View on WMT Shares Before Earnings

Walmart's earnings release tomorrow could bring in more bulls

Walmart Inc (NYSE:WMT) will report earnings before the open tomorrow, Nov. 14, and the stock just received a bullish analyst note from Telsey Advisory Group. The firm lifted its price target on the Dow component to $130 from $125, putting it deeper into record-high territory. WMT shares peaked at $120.92 last week, and are trading right in line with their 20-day moving average, last seen at $119.40.

Looking back, the equity has moved higher the day after earnings in three straight quarters, including a 6.1% jump in August. The options market is pricing in a 6.3% post-earnings swing for tomorrow's trading, and call buying has remained popular at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The 10-day call/put volume ratio across those exchanges is 2.28, showing call buying has doubled put buying in the past two weeks. In the front-month November series, peak open interest is at the 125-strike call, with the 120-strike call close behind.

If Walmart does report strong earnings, it could result in a wave of price-target hikes, since its average 12-month price target is just $123.58. Upgrades are possible, too, since there remain seven "hold" ratings out there.