 Retailer Walmart continues to outperform expectations and has set its stock price up for a big move that could add 20% to its price before... ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ |
| | Written by Thomas Hughes 
Walmart’s (NYSE: WMT) stock price is set for a big move due to underlying strengths, market positioning, guidance, high potential for positive catalysts, and analysts' sentiment. The analysts' sentiment trends ahead of the FQ1 2026 earnings report were bullish, leading this market to new highs, and are unlikely to reverse now. The risk is that analysts may only reaffirm their targets, potentially capping a rally that still has 10% or more left to run. The critical details are the increasing coverage, firming sentiment, a Buy rating, and steadily increasing price targets that implied a move to the high-end range, a 10% to 20% increase from the pre-release trading levels in mid-May. 
Walmart’s Cautious Tone Hints at Positive Surprises Later in the Year Walmart’s guidance is the only negative aspect of its Q1 release and update, even though it isn’t bad. The company reaffirmed its forecast for 3.5% revenue growth for the year, with strength in the front half and slightly weaker results in the back. The guidance included commentary that consumers may experience higher retail prices before the end of FQ2 due to tariffs, but this is insufficient for execs to alter the outlook. Results in Q1 included slower growth but a still stronger-than-expected 2.5% increase driven by digital, U.S. comps, and Sam’s Club. Segmentally, U.S. Walmart sales grew by 3.2% on a 4.5% comp. International sales were weaker, flat compared to last year, while Sam’s Club grew by 2.9%. Sam’s sales ex-fuel grew by a stronger 5.5%, driven by a 14% increase in membership revenue, a mid-single-digit increase in tickets and a slight decline in check average. The advertising business is also doing well, growing by 50%, including the addition of Vizio and a 31% increase in Walmart Connect in the U.S. The margin news is also good. The company widened its gross margin and produced a better-than-expected bottom line result. The $0.61 in adjusted EPS is up a penny compared to last year, a slower 1.6% growth pace compared to the 2.5% top line, but fully 500 basis points better than MarketBeat’s reported consensus. Earnings strength is also seen in operating cash flow, which is up 25%, and free cash flow, which increased by $0.9 billion compared to last year’s negative figure, producing $0.4 billion in positive FCF. As for the guidance, it is slightly weaker than the consensus forecasts but includes growth and an expectation for solid margin, cash flow, and free cash flow. Walmart’s Capital Return Helps Drive Market Sentiment Walmart’s results and guidance highlight the strength and reliability of its capital return. The capital return includes dividends and share buybacks that reduce the count incrementally on a quarter-to-quarter basis. The dividend is reliable because it is less than 40% of the earnings outlook and backed up by a strong balance sheet. The company raised some cash via debt in Q1, but not an alarming amount, and favorable rates were cited. The net impact is that the cash balance is relatively flat compared to last year, and debt is slightly higher. Still, other liabilities have decreased, leverage remains low, and equity is rising. Walmart’s price action following the release was mixed and could result in some near-term volatility. An initial stock price increase was followed by a decline, foreshadowing a potentially mixed market after the open. However, the market remained above critical support levels, aligning with near, mid and long-term trends, and looked poised to rally higher. The critical support level in mid-May is the 30-day EMA near $94.50; a move below it could take this market down to 490 or lower. The critical resistance target is near $100; a move above it will likely lead to another 10% to 20% upswing.  Read This Story Online | |
| Written by Gabriel Osorio-Mazilli 
Average investors focus on the next year or two for a company they consider buying for their portfolios, but those who can keep a longer time horizon in mind stand out above the crowd. There are several examples of legendary value investors who don’t often move their money around, but every time they do, they sure keep a hold of their picks for at least half a decade to let their views properly play out. Today, there’s an opportunity not to be the average investor in the retail sector but rather hang on to an opportunity that will likely develop for a few years to come, unlocking value for shareholders and seeing their portfolios turn green. With a deep fundamental view and taking advantage of all the uncertainty and volatility in the S&P 500 today, an unlikely deal has unlocked the opportunity investors had been patiently waiting for. Athletic and sportswear giant DICK’s Sporting Goods Inc. (NYSE: DKS) has landed a deal to acquire another well-known brand in the United States, a combination that will likely bring the company to new heights by adding Foot Locker Inc. (NYSE: FL) to its ecosystem. The connection may not be immediately obvious, but the market clearly sees what’s coming—and the outlook is undeniably optimistic. Price Action Subtly Confirms a Bullish Move When it comes to acquisitions, investors need to keep in mind that the company doing the buying will likely see its stock price come down as an initial reaction to the news, while the company getting bought will rally instead because of the “way out” that is being offered by the bigger fish. For DICK’s, a fall from $227 per share down to $183 (a decline of nearly 20%) might spell trouble ahead, or perhaps a sign that management made the wrong move here. However, this is normal behavior, and exactly where investors need to zoom into the implications of a combined business moving forward for its impact on valuations. Falling to only 72% of its 52-week high, shares of DICK’s now give investors a chance to reassess the future of this deal and potentially get a great bargain on it, before everyone else realizes where the true value should be moving forward. A Future With Foot Locker by DICK’s Side? While some Wall Street analysts may be downplaying the future of this acquisition through a recent downgrade of DICK’s stock on the news, investors can see this as a likely reaction to the stock’s price performance which is typically the case as analysts aren’t known for going against the chart most of the time. An analyst from TD Cowen decided to downgrade DICK’s stock from a previous Buy rating down to a Hold. However, the price target remained the same, which is interesting. Seeing a fair valuation on DICK’s at $216 per share, this suddenly bearish analyst still calls for as much as 20% upside from where the stock has fallen to on the news. There’s a reason this analyst didn’t lower the price target and why the consensus view still calls for a 31.5% upside via a set $236.4 per share price target. It’s all deeply rooted in the fundamentals of the new combined business moving forward. Looking at Foot Locker’s latest quarterly earnings report, investors can find that just the opposite is taking place. The company swung from a net loss per share of $4.13 during the same quarter a year ago to an astonishing shift to profitability this year, reporting as much as $0.51 in earnings per share (EPS). It seems that DICK’s decided to acquire Foot Locker just as its business seems to be nearing a bottoming of its internal cycle of profitability and margins. The company saw a 3% increase in gross profit margins over the year, as well as new management initiatives to cut costs and manage capital better. What Is Being Added for Investors? DICK’s shareholders now enjoy a return on invested capital (ROIC) rate of up to 15% on the year, which is the sort of theme that value investors hunt for when looking to compound their capital moving forward. Adding the new profitability from Foot Locker will only allow management to keep reinvesting and compounding more capital as the combined businesses go along, though it isn’t the latest $49 million in net income reported, but rather the long-term averages outside of tariff uncertainties that look closer to $350 million. This development might start to justify the fact that 4.5% of DICK’s stock’s short interest left the scene over the past month, a sign of bearish capitulation as short sellers face the pressures of a growing business and fundamentals on this new combination. Tying it all together as of May 2025, allocators from the Vanguard Group view the alignment as bullish, which is why they boosted their holdings in DICK’s stock by as much as 8.8% to net their position at $1.2 billion today. The opportunity to be inside malls and offer sportswear to match their current consortium will likely bring more growth to this combined entity. Read This Story Online | When Trump took office in 2017, gold was just $1,100 an ounce. By the time he left, it had soared to $1,839.
Now… as new tariffs take effect, gold is breaking records again.
You've hopefully already seen this in action… but gold is surpassing $3,000 per ounce for the first time EVER. Go Here to Learn What's Happening and How to Prepare >> |
| Written by Chris Markoch 
Microsoft Corporation (NASDAQ: MSFT) and OpenAI have announced that they are looking to reset their partnership. The reset is the latest chapter in a story that’s been building between the two companies for the last six years. In this case, it should be profitable for MSFT stock. The partnership between Microsoft and OpenAI started in 2019 with a $1 billion investment from Microsoft. Over the next several years, that investment grew to over $13 billion, giving Microsoft access to OpenAI’s ChatGPT generative AI program. In that time, Microsoft built its network of AI agents (i.e., Copilots) that ran on top of ChatGPT. This relationship vaulted Microsoft to the forefront of the AI race, and shareholders were the beneficiaries. MSFT stock has delivered a total return of over 140% in the last five years. However, since 2023, the relationship between OpenAI and Microsoft has become more strained, starting with OpenAI’s decision to fire Sam Altman in December 2022. At that point, the company’s partnership was yielding positive benefits for both sides. But it also crystallized the idea that the partnership would have to evolve or end. Breaking Up Is Hard to Do In January 2025, OpenAI and Microsoft seemed to be heading for a messy breakup. At that time, Microsoft confirmed that it was no longer going to be OpenAI’s sole cloud provider. However, OpenAI was making a “new, large commitment” to Microsoft’s AI cloud computing platform, Azure. OpenAI was planning to place its business under the control of a for-profit business. That plan has now been abandoned. However, the company’s goals of being a public company haven’t ended, and it will now be financed by none other than Microsoft. That’s right. While the terms of the new funding aren’t completely clear, it appears that OpenAI will be using some of the $13 billion from Microsoft to fund an initial public offering (IPO). But the plot thickens. Microsoft is expected to have an undefined level of equity in OpenAI’s new business. However, reports are saying that Microsoft may be willing to reduce its equity stake if OpenAI allows Microsoft to have access to new technology developed by OpenAI after the 2030 cutoff. This would be a key concession from OpenAI and it would be yet another reason for long-term investors to be bullish on MSFT stock. The OpenAI News Allows MSFT Shareholders to Focus on the Bigger Picture Microsoft stock is up about 3% in a week when the bulls returned to Wall Street. That’s far below the returns of other technology stocks like NVIDIA Corp. (NASDAQ: NVDA) and Apple Inc. (NASDAQ: AAPL) that have gained 15% and 7%, respectively. However, Microsoft had less to catch up on. Over the last month, MSFT stock is up 18.9%. This cements the notion that Microsoft is a tariff-proof stock. The company will have some exposure to tariffs with its Xbox system. But overall, the company’s software products are immune to tariff concerns. That said, the company has trimmed its workforce by 3% in the last week. Those cuts, which included many management positions, aren’t being made because of AI efficiencies. Microsoft may be trying to get ahead of what it perceives as a weaker environment for consumer spending on items like video game consoles and personal computers. At 36x earnings, MSFT stock is trading at a slight premium to its historical averages and near the top of its 52-week range. Those are two reasons MSFT stock hasn’t climbed even after delivering stellar earnings. However, the Microsoft and OpenAI reset is another reason investors are bullish on MSFT stock. Read This Story Online | |
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