Wal-Mart shares gain the most in over a year on Tuesday, retailer announces $20 billion share buyback plan

On Tuesday Wal-Mart Stores Inc (WMT) said it intended to launch a new two-year $20-billion share buyback plan. The latter will replace a $20-billion repurchase, which was approved in October 2015. The company also projected a 40% surge in its on-line sales in the United States during the fiscal year ending in January 2019.

Wal-Mart shares closed higher for a second consecutive trading session on Tuesday. It has also been the sharpest daily surge in more than a year. The stock went up 4.47% ($3.60) to $84.13, after touching an intraday high at $84.88, or a price level not seen since February 18th 2015 ($86.30).

In the week ended on October 8th the shares of the retail chain added 1.10% to their market value compared to a week ago, which marked the first gain in three weeks.

The stock has extended its advance to 7.67% so far during the current month, following a 0.09% increase in September. The latter has been the sixth gain out of eight months.

For the entire past year, Wal-Mart shares gained 12.76%. The stock has risen 21.72% so far in 2017.

According to Wal-Marts latest projection, overall net sales may surge 3% during the fiscal year ending in January 2019.

At the same time, the retailer forecasts a 5% increase in profit for fiscal year 2019 compared to the expected adjusted earnings per share of $4.30 to $4.40 in the fiscal year ending in January 2018.

Wal-Mart also said it expected to add 1 000 locations to ship on-line orders during the fiscal year ending in January 2019. At present, on-line grocery orders are shipped from over 900 locations across the United States.

“It is clear that Wal-Mart intends to continue to turn up the heat online, with 40 percent annual growth an impressive goal, especially on the heels of the 30 percent outlined at the 2016 investor meeting, which at the time seemed aspirational in our view,” Charlie OShea, Lead Retail Analyst at Moodys, was quoted as saying by Reuters.

In August, the retail chain reported a 60% surge in its on-line sales in the United States during the quarter ending in July and a 2% increase in its total revenue to $123.4 billion.

However, the company said that present-quarter earnings might miss market consensus, with margins being pressured by price cuts and intense spending on e-commerce.

According to CNN Money, the 30 analysts, offering 12-month forecasts regarding Wal-Mart’s stock price, have a median target of $84.00, with a high estimate of $93.00 and a low estimate of $61.00. The median estimate is a 0.15% decrease compared to the closing price of $84.13 on October 10th.

The same media also reported that 16 out of 32 surveyed investment analysts had rated Wal-Mart Stores’ stock as “Hold”, while 13 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the Wal-Mart stock are presented as follows:

R1 – $84.33
R2 – $84.53
R3 (Range Resistance – Sell) – $84.74
R4 (Long Breakout) – $85.34
R5 (Breakout Target 1) – $86.05
R6 (Breakout Target 2) – $86.37

S1 – $83.93
S2 – $83.73
S3 (Range Support – Buy) – $83.53
S4 (Short Breakout) – $82.92
S5 (Breakout Target 1) – $82.21
S6 (Breakout Target 2) – $81.89

By using the traditional method of calculation, the weekly levels of importance for Wal-Mart Stores Inc (WMT) are presented as follows:

Central Pivot Point – $78.77
R1 – $80.04
R2 – $81.08
R3 – $82.35
R4 – $83.62

S1 – $77.73
S2 – $76.46
S3 – $75.42
S4 – $74.38