Wal-Mart Stores operates discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, cash and carry stores, home improvement stores, specialty electronics stores, restaurants, apparel stores, drug stores, and convenience stores under the Walmart U.S., Walmart International, and Sams Club, worldwide. The company was founded in 1945 and is based in Bentonville, Arkansas.
WMT Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Walmart Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Walmart Inc ranked in the 37th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 35.33%. In terms of the factors that were most noteworthy in this DCF analysis for WMT, they are:
The company's debt burden, as measured by earnings divided by interest payments, is 8.95; that's higher than 73.42% of US stocks in the Consumer Defensive sector that have positive free cash flow.
WMT's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 27.13% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
INGR, SYY, CVGW, LFVN, and RMCF can be thought of as valuation peers to WMT, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
Thesis There's a reason why things are called "consumer staples". First, consumers obviously buy them. Second, while they are not absolute requirements for sustaining life, they are considered household necessities in the developed world. It stands to reason that consumer staples are thus relatively recession-proof. That's why they are called...
Financial Freedom Institute on Seeking Alpha | July 10, 2020
Already the third largest pharmacy in the U.S., Walmart's (WMT) efforts to open health clinics and acquire technology that will help patients manage their medical care make it a "sleeping giant to watch," Morgan Stanley says."A multi-pronged approach makes a lot of sense, and recent steps are clear indications this...
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