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Walmart or Amazon?
That's the question some investors are struggling with after Walmart announces its intention to launch overnight delivery for more than 200,000 products. The announcement on Tuesday came a few weeks after Amazon announced its intention to make day-to-day delivery the norm for Premium members.
But Ari Wald, senior technical analyst at Oppenheimer, clearly has a favorite.
"We think the benefit is going to Amazon," he told Tuesday at "Trading Nation".
Wald drew attention to a graph showing the relative relationship between rivals' stock performance. When the line goes up, Amazon outperforms Walmart; when it falls, Amazon is underperforming.
After the rally of Amazon in the first half of 2018, the group spent the second half of last year down, which the Wald team considered "a correction of the trend to the rise, "he said.
"More recently, we have seen the ratio stabilize and return now to Amazon, which has gone higher," he added. "We view this as a resumption of Amazon's long-term outperformance trend, which is probably not necessarily a case against Walmart, but rather for the optimistic deal to be more compelling for Amazon. "
Gina Sanchez, founder and CEO of Chantico Global, also preferred Amazon, but not for the same reasons.
The announcement of the next day's delivery, by Walmart, was not really surprising considering the company's willingness to expand its e-commerce segment, but that does not mean that it's "Acting suddenly from a comparison comparable to that of Amazon," she said.
"Moving to delivery the next day or the same day is only one step in the next direction, and the cost this represents for Walmart is not actually so high," Sanchez said. . "However, we would say that comparing Walmart to Amazon is not really a comparison of apples to apples because Amazon is more than a mere e-commerce site." Amazon offers a much broader offering including their web services , … and it's actually a big growing component that really has nothing to do with the engines that drive the business. "
As such, Sanchez said that she considered Amazon as the best choice, but added that she was not totally sold on the problem in question.
"We would accept the idea that Amazon is probably a better deal at the moment, but we think that all that same day delivery is not viable," she said. "We think it's only Amazon that is trying to get Walmart to spend money without having to spend it, so let's see how it goes." Walmart is clever, they know well manage their margins, and if that's indeed the case unsustainable, we'll know it soon. "
Amazon shares, up almost 23% since the beginning of the year, were flat against the market preceding Wednesday's sale, a day after rising nearly 1%. Walmart's shares rose 0.3% in the market leading up to Wednesday's sale and less than half of 1% Tuesday, following the announcement of the delivery. The stock is up less than 8% for 2019.
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