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 42th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Walmart Inc ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 10.41 -- which is good for besting 74.53% of its peer stocks (US stocks in the Consumer Defensive sector with positive 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 26.35% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
BUD, NWL, HSY, LFVN, and STZ 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.
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