Walmart May Rise Over 3% on Investor Day, Morgan Stanley Says

(Bloomberg) -- Walmart’s much-anticipated investor day on Oct. 16 is expected to be a volatile trading event and shares could gain over 3 percent, Morgan Stanley analyst Simeon Gutman wrote in a note.

If the retailer makes a “credible case for moderating e-commerce losses and a path to leveraging this channel,” there is a 70 percent chance of the stock gaining over 3 percent, Gutman said. Walmart is also expected to establish its guidance for fiscal year 2020 at the event.

“The size of the reaction hinges on how investors view Walmart’s plan to leverage e-commerce investments in the medium-term and the messaging around Flipkart/International,” Gutman wrote. According to Morgan Stanley’s base case assumption for the investor day, the company is expected to set a target for 5 percent increase in earnings per share.

Walmart’s annual October investor day has typically been trading catalyst, and the shares have moved at least three percent on that day in the past four years. Gutman has the equivalent of a hold on the stock, and has a price target of $98.

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