Shares of Walmart (WMT) have struggled since early October but have been strong over the past year, and are up more than 20%. Investors are hoping that will still be the case come Thursday morning, when the company reports earnings.

Will the company issue lower-than-expected guidance? It wouldn't be a surprise to TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio. The company is setting up 2017 to be an investment year, he said from the floor of the New York Stock Exchange Wednesday.

If Walmart doesn't lower guidance, then perhaps the consumer is a lot stronger than most investors currently realize, he added.

Cramer said that Walmart could receive a "pass" from lowered expectations, since it is making moves to be more competitive in the new world of retail. Cramer highlighted the company's acquisition of Jet.com as an example.

While Walmart is making the right moves, Cramer says he's more inclined to go with Target (TGT) , even though the latter is posting a big rally Wednesday on better-than-expected earnings.

Analysts expect Walmart to earn 96 cents per share on $118.69 billion in sales.

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.

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