Walmart is gearing up for its quarterly earnings report, scheduled for before the bell on Thursday, and despite its dramatic underperformance this year, one market strategist says the stock is a buy.

Walmart shares are trading firmly in correction territory, down 13 percent in the past six months making it one of this year's worst-performing Dow stocks. Recently, the stock has managed to bounce off its year-to-date lows, cutting some of its losses in the past three months as retail stocks across the board have been rallying.

Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, told CNBC's "Trading Nation" on Wednesday that he's bullish on the name. Here's what he said.

· Walmart is a long-term buy, as the company embarks on a rebranding transition from being the "cheapest" retailer to being the "least expensive" one. It's a subtle, yet important, distinction that should continue to elevate its presence among middle-income consumers.

· The company has upgraded inventory, particularly in groceries and digitized storefronts for self-checkout; it's also building momentum in the e-commerce space with its Jet subsidiary. Its new deal with Ellen DeGeneres, for a denim line, could drive traffic into stores.

· Although the investments in e-commerce will continue to weigh on its capital expenditures through 2019, the market share wins should lay the foundation for future growth.

· From a technical perspective, Walmart is trading nearly at the midpoint of its 52-week range, between its October 2017 low of $77.50 and its January high of $109.98. That positioning on the chart, along with its 2.2 percent dividend yield, makes it a promising long-term play.

Wall Street analysts are expecting earnings of $1.22 per share, according to FactSet data. The stock's average rating is overweight.

Bottom line: Walmart shares have badly underperformed this year, but Schlossberg says the stock is a buy ahead of earnings.