Shares of Wal-Mart have been on a tear, rising for 11 consecutive sessions — their longest winning streak since the 12-session string that ended in February 1995.
Some strategists and analysts see further upside for the stock, which has already climbed 17 percent year to date, as the retailer has made significant efforts to compete with Amazon in the e-commerce space.
“There’s all this talk about Amazon, and how great Amazon is, but wouldn’t it be great to own Amazon at 15 percent of its price? And that’s what you’re getting with Wal-Mart, because Wal-Mart has taken huge strides in increasing their online presence through acquiring online shopping sites like Jet.com,” said Mark Tepper, founder and partner at Strategic Wealth Partners.
“They’re gearing up to battle Amazon head-on, and whereas Amazon’s price advantage in the past was very strong, it’s weakening,” he added Thursday on CNBC’s “Trading Nation.”
Indeed, Oppenheimer analysts on Wednesday wrote in a note to clients that “it feels as if the battles have only started between WMT and AMZN.”
Analyst Rupesh Parikh wrote that Wal-Mart’s journey as a retailer is “fresher than it’s been in years,” pointing specifically to strides in e-commerce. Wal-Mart acquired Jet.com last August for $3.3 billion. At the time, it was the largest acquisition of an e-commerce company.
“In our view, in acquiring eCommerce operators, WMT is much more focused upon purchasing key, unique capabilities and technologies, rather than upon simply adding sales,” Parikh wrote.
Some believe the rally is a little overdone. After all, Wal-Mart shares have risen more than 7 percent in the last month alone. On a short-term, technical basis, the $80.87 stock appears overbought, said Miller Tabak equity strategist Matt Maley.
“It’s getting to the top end of its upward-sloping trend channel. So it might take a little bit of a breather here, but that’s OK, it’s had a nice run,” Maley said Thursday on “Trading Nation.”
“To be honest with you, it’s funny because the entire retail sector on a technical basis looks quite good. I mean, the XRT had made a double-bottom back in June and it started to move up highly, making a couple of higher highs and higher lows. If it could move above its early June lows, above $41.60-ish, that’s going to give it real momentum that’s going to get the group to move even higher,” Maley said, referring to the popular retail exchange-traded fund. A so-called double-bottom is considered a positive sign in technical analysis.
Shares of Wal-Mart closed modestly higher Thursday.
Disclosure: Mark Tepper does not personally own shares of Wal-Mart, but his firm does for clients.