It can be said that for retailers of all shapes and sizes 2020 to date has been a challenging year. But what is evident, even at this stage in the pandemic, is that the headwinds of COVID-19 have affected companies unevenly, with those with greatest market share tending to suffer less. As far as the Walmart share price we saw much less of a downturn in the general stock market selloff during March.
Instead, WMT shares are one of a select group where the stock is now trading significantly higher than it was pre-pandemic. Indeed, it is worth looking at the factors surrounding the giant US retailer. Much of the positivity surrounding the Walmart share price in recent months appears to be less to do with the difficulties in the retail space, and more related to the company’s ability to outshine analysts expectations. The key as far as the ongoing rally is concerned is whether Walmart can continue to remain one step ahead of the market.
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Walmart shares corporate strategy
In times of crisis it is very often the strategic capability of management to steer a company in the right direction, and with Walmart we have seen this illustrated in recent months. For instance, early in November the company announced a retreat from its Argentina operations. This was well received by the market, suggesting that Walmart was keen to focus on core markets offering the most reliable returns. In fact, it is this ruthless pruning of any weak performance that explains why Walmart shares continue to outperform.
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Consistency of earnings for WMT shares
The consistency of earnings this brings was illustrated by the latest Q3 earnings forecast, which came in at $132.7bn, a year on year rise of 3.7%. This is not only outstanding in its own right for a $400bn market capitalisation company. It also underlines the way that for Walmart shares to date, the pandemic environment appears to have been a positive for earnings.
Such a counterintuitive conclusion clearly explains why the WMT share price has become something of a stock market darling, rather in the way the likes of Amazon (AMZN), despite Walmart not being known primarily as a retailer that provides delivery in the way its rival Amazon does.
Walmart share price and COVID-19 vaccines
But key to any analysis of Walmart is how one expects the company to do going into 2021. This is especially so if the effects of the pandemic start to wane and the retail sector returns to a semblance of normality. A clue in this respect came early in November with the double vaccine news from Pfizer (PFE) and Moderna (MRNA). This caused the Walmart share price to gap higher, hitting new peaks for 2020 above $150. These gains have been maintained, something which suggests that investors are betting on further growth, and are content with the prospect of ongoing dividend hikes, and even the higher analyst share price targets for the group at $175.
Given the latest breakout for WMT shares to new all time highs, it would appear that only sustained price action back below the late October support at $137 would really delay ongoing technical bullishness surrounding the Walmart.
How to trade shares with ATFX
Looking to trade Walmart shares and other major company shares? Open a live or demo account with ATFX to get up to speed. Start trading now to benefit from competitive spreads, high-quality trade execution, and no commission.
1. Register for an account or log in to your existing account
2. Open MT4 either on your desktop or mobile
3. Search for Walmart shares in the market watch or symbols window
4. Choose your position size
5. Hit buy or sell, and then confirm the trade
WMT share price daily chart
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