Walmart Stock Shows Pre-Earnings Strength; The holding company looks set to regain favor with Wall Street

After a tough week of tech earnings reports from companies like Palantir (PLTR) i Holding arms (ARM), some of the best-performing retail stocks, including Walmart stock, are holding near pre-earnings highs.


Walmart (WMT) is less than 3% from its high and results will be released on Thursday before the open. Other retailers on the earnings calendar include: Home warehouse (HD), which has been heavily sold by institutional investors in recent weeks. The large-scale sale began on April 1 after the company announced plans to acquire SRS Distribution for $18.25 billion.

As homeowners retreat from do-it-yourself projects, Home Depot is trying to win more business from contractors who do more complex and lucrative construction work. Chief Executive Officer Ted Decker said the deal adds $50 billion to Home Depot’s addressable market. The home furnishings retailer made the announcement early Tuesday morning.

Walmart stock databases

Walmart stock is trading just above its 50-day moving average, forming a flat base with a post of 61.66. The stock rallied sharply on February 20, but by the end of the day the 6.4% gain had been halved. Earnings and revenues for the holiday quarter and revenues for the quarter ended January accelerated from the previous quarter, by 7% and 6%, respectively.

sdrl wmt

The retail leader also announced plans to acquire smart TV maker Vizio for $2.3 billion, or 11.50 a share. The deal will help Walmart accelerate its advertising business.

Global e-commerce revenue increased by 23% and exceeded $100 billion. In the US, e-commerce revenues increased by 17%.

While several companies are cutting costs, Walmart continues to spend money to make money. Earlier this year, the company announced it would open or expand more than 150 U.S. stores over the next five years. Previously, Walmart said it plans to modernize more than 1,400 of its existing Walmart stores.

Analysts surveyed by Zacks Investment Research expect adjusted earnings of 52 cents per share for the quarter ended April, up 6% year over year, on revenue rising 4.5% to $159.2 billion.

I watch Seadrill, About Farms and take a trip

Fast-growing oil drilling rig Seadrill (SDRL) has returned to the rally after falling more than 7% below a buy point of 50.72. The stock returned near the highs, approaching an alternative entry of 53.58.

Shares rallied sharply on Feb. 29 after the company reversed a year-earlier loss to post adjusted earnings of 95 cents per share. Revenue increased 79% to $408 million.

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In December, Seadrill secured contracts worth $1.1 billion in Brazil. Starting in the fourth quarter, the company will operate six drillships off the coast of Brazil.

Elsewhere, premium footwear manufacturer On hold (ONON) has come under selling pressure ahead of Tuesday’s earnings report. Sellers hit On Holding shares hard on March 12 after the company reported an unexpected loss and a slight decline in revenue.

On Holding continues to trade at a higher valuation, but also offers a compelling growth story. Full-year earnings are expected to grow 51% this year and 47% in 2025.

For the first quarter, analysts surveyed by FactSet expect earnings of 16 cents per share, unchanged from a year ago, with revenue growing 23% to $557.8 million. Analysts expect revenues of $497.2 million.

Finally, an online travel agency based in India MakeMyTrip (MMYT) will release results early Wednesday. After the end of long consolidation in early August, the company’s shares are still in a strong upward trend.

Quarterly earnings will increase 24% to 26 cents per share and revenue will increase 31% to $195.15 million.

Options trading strategy

A basic earnings-driven options trading strategy – using call options – allows you to purchase a stock at a predetermined price without taking on much risk. Here’s how the options trading strategy works and what call option trading has been like for Walmart stock recently.

First, identify the top-rated stocks using a bullish chart. Some may establish a solid foundation early on. Moreover, others may have already broken out and received support for the first time in their 10-week lines. And some of them may be trading tight near the highs and not giving up much ground. Avoid extended stocks that are too far from the correct entry points.

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A call option is a bullish bet on a stock. Put options are bearish bets. One call option contract gives the holder the right to buy 100 shares of the company’s stock at a specific price, called the exercise price.

Once you have identified a bullish setup on the earnings calendar, check strike prices on your online trading platform or at Also make sure the option is liquid and has a relatively tight bid-ask spread.

Look for the strike price just above the underlying share price – that’s not the amount – and check for the premium. Ideally, the premium should not exceed 4% of the current share price. In some cases, an in-the-money strike price is OK as long as the premium is not too expensive.

Select an expiration date that matches your risk goal. However, remember that in the options market, time is money. Short-term expiration dates will have cheaper premiums than those that are more distant. Buying time in the options market involves higher costs.

Trading Walmart Stock Options

When Walmart stock was trading at around 60.50, a slightly out-of-the-money weekly call option with a strike price of 61 and a May 24 expiration date carried a premium of about $1.25 per contract. At that time, it represented 2% of the company’s share price.

One contract gave the holder the right to buy 100 shares of Walmart stock at 61 per share. The maximum loss was $125 – the amount paid for a 100-share contract. To break even, Walmart would need to increase to 62.25 based on the premium paid.

The expected move in the Walmart stock options market, based on an at-the-money strike price of 60, is almost 3 points up or down. This can be achieved by adding the at-the-money call premium and the put premium for the May 17 contract.

The call option for On Holding was more expensive. When the stock was trading at around 31.75, a weekly call option with a strike price of 32 and an expiration date of May 17 offered a premium of about $1.95 per contract. At that time, it represented 6% of the share price.

The expected movement of the On Holding stock option, based on the strike price at 31.40, is almost 4 points up or down.

Follow Ken Shreve on X/Twitter @IBD_KShreve for more stock market analysis and insights.


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