Walmart Earnings Preview: Traders Expect 5% Move Amid Cautious Optimism

The upcoming earnings report from Walmart is expected to have a significant impact on the company's stock price. Options pricing suggests that traders anticipate the shares moving up to 5% by the end of the week, with a potential swing of up to 4.5% in either direction.

This would translate to a possible high of $122 or a low of $112, based on the current stock price around $117. The retailer's shares have trended lower since its last report in May amid worries about inflation pressuring spending by American consumers.

However, analysts from JPMorgan and UBS are cautiously optimistic, with JPMorgan stating that expectations for Walmart's report 'have and will continue to come down', potentially setting the retailer up to report better results than Wall Street has feared. UBS analysts see the stock's recent pullback as creating an attractive setup for investors.

Walmart is expected to report revenue of $186.78 billion for the second quarter, with adjusted earnings of 74 cents per share, a growth of 6 cents from last year. Comparable sales growth is seen coming in just under 4%, according to Visible Alpha estimates.