Kroger and Wal-Mart are Tightening Up On Gun Policies

Kroger (Ticker Symbol: KR) and Walmart (Ticker Symbol: WMT) announced that they both would be cracking down on gun control within their stores after the mass shootings that have occurred over the past few months.

Both of the major retailers are prohibiting customers from openly carrying guns in any of its stores within the states that allow the open carry law unless they are law enforcement officials. Kroger and Walmart are both encouraging the government to strengthen background checks to help keep weapons from people who could possibly pose a risk for violence.

Walmart announced Tuesday that they will no longer be selling handgun ammunition along with short barrel rifle ammunition that can be used with combat weapons. Walmart also announced it will stop selling handguns in Alaska, which means the world’s largest retail store is completely out of the handgun business.

When Walmart released its quarterly earnings last month, the company said that it had around a 20% share of the market for ammunition in the country, a number that will obviously now be diminishing in the future quarters.

Above is a shorter-term chart of Walmart’s stock.  The stock spent April-June stuck in a trading range — finding resistance at the $104.00 price level and finding some dynamic support at its 100-day moving average around the $100.00 price level.  Walmart finally broke from those levels and went on to rally 11% before finding some resistance at $115.00 in the middle of July. The stock pulled back nearly 10% finding some support its 100-day moving average again, which was near $104.00.  That was the same area that the stock broke out from in early June.  When resistance breaks, it can oftentimes become support.  Conversely, when support levels break, they can become resistance levels.  For example,  if one was to fall through the floor and look up, that same floor, would no longer be the floor (support), it would now be the ceiling (resistance).  Walmart’s stock proceeded to move higher, to trade to an all-time high on September 4th, at $115.96.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of five analysts offering 12-month price targets, the average price target for Kroger’s stock is $25.40 According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $24.01.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 19 analysts offering 12-month price targets, the average price target for Walmart’s stock is $120.00. According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $115.85.

Walmart did mention that the company was cracking down on customers who use the “open carry” law, not necessarily “concealed carry” gun laws, as it is still trying to respect customers’ rights. Time will tell if the actions from the retailers will have some positive effects on gun violence in this country.

Investors in the retail sector should look to Kroger’s next earnings release on September 12th for more news and updates within the retail sector.