Walmart Inc.

Date: February 05, 2024.

Company’s Overview

Walmart Inc. (WMT) is a multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. The company is headquartered in Bentonville, Arkansas, and operates over 10,500 stores and clubs under 48 banners in 24 countries. Walmart is the world’s largest retailer by revenue, and it employs over 2.3 million associates worldwide. The company’s products and services include groceries, apparel, electronics, toys, home goods, and more.

Competition

Revenue Segments

The Company’s revenue proportions by segment for the most recent quarterly report (10-Q) are composed by:

Related Risks

Walmart faces a range of both external and internal risks that could impact its business and financial performance. External risks include economic downturns, competition from e-commerce, pricing pressure, supply chain disruptions, and technological disruption. Internal risks include employee turnover, compliance issues, brand reputation, and strategic missteps.

However, Walmart is taking proactive measures to address the risks that could impact its business. These initiatives focus on diversifying revenue streams, enhancing e-commerce capabilities, controlling costs, strengthening supply chain resilience, embracing technological advancements, retaining employees, improving compliance, bolstering brand reputation, and conducting thorough due diligence.

Company’s Profitability

Revenues from 2021 to last quarter report:

• Walmart revenue for the quarter ending October 31, 2023 was $160.804B, a 5.23% increase year-over-year.
• Walmart revenue for the twelve months ending October 31, 2023 was $638.785B, a 6.44% increase year-over-year.
• Walmart annual revenue for 2023 was $611.289B, a 6.73% increase from 2022.
• Walmart annual revenue for 2022 was $572.754B, a 2.43% increase from 2021.
• Walmart annual revenue for 2021 was $559.151B, a 6.72% increase from 2020.

The quarterly revenues from 2011 till 2023 are:

Net Income from 2021 to last quarter report:

• Walmart net income for the quarter ending October 31, 2023 was $0.453B, a 125.19% decline year-over-year.
• Walmart net income for the twelve months ending October 31, 2023 was $16.292B, a 81.69% increase year-over-year.
• Walmart annual net income for 2023 was $11.68B, a 14.58% decline from 2022.
• Walmart annual net income for 2022 was $13.673B, a 1.21% increase from 2021.
• Walmart annual net income for 2021 was $13.51B, a 9.21% decline from 2020.

The quarterly net income from 2011 till 2023 is:

EPS from 2020 to last quarter report:

• Walmart EPS for the quarter ending October 31, 2023 was $0.17, a 125.76% decline year-over-year.
• Walmart EPS for the twelve months ending October 31, 2023 was $6.02, a 86.38% increase year-over-year.
• Walmart 2023 annual EPS was $4.27, a 12.32% decline from 2022.
• Walmart 2022 annual EPS was $4.87, a 2.53% increase from 2021.
• Walmart 2021 annual EPS was $4.75, a 8.48% decline from 2020.

Shares Outstanding

Walmart has a share repurchase program. As of October 31, 2023, the company had authorization to repurchase up to $20 billion of its outstanding common stock. Walmart has repurchased approximately $8.6 billion of its shares under this program through the end of 2023.

Management

Walmart is taking decisive action to enhance its competitiveness and long-term growth prospects. These initiatives focus on accelerating e-commerce expansion, diversifying revenue streams, strengthening supply chain resilience, embracing technology, investing in employee success, and demonstrating a commitment to sustainability. By implementing these strategies effectively, Walmart is well-positioned to navigate the dynamic retail landscape and achieve sustainable success.

Guidance

Walmart provided guidance for the first quarter of 2024. The company expects to report revenue of between $132.74 billion and $139.89 billion, representing year-over-year growth of 3.54% to 5.23%. Adjusted earnings per share (EPS) are expected to be between $1.38 and $1.46, representing year-over-year growth of 5.7% to 8.2%.

Growth

Walmart’s guidance for the first quarter of 2024 indicates a growth rate of 3.54% to 5.23% year-over-year for revenue, and 5.7% to 8.2% for adjusted earnings per share (EPS). This implies that Walmart’s revenue is expected to increase by 3.54% to 5.23% compared to the first quarter of 2023, and adjusted EPS is expected to increase by 5.7% to 8.2% compared to the first quarter of 2023.

The Company is expected to experience moderate growth in the foreseeable future, with its revenue projected to reach $636.83 billion by 2027, reflecting an annualised growth rate of 3.86% from 2023 to 2027. This growth is being driven by various factors, including the sustained expansion of the global retail market, the growing adoption of Walmart’s products and services, and the company’s strategic investments in emerging areas like omnichannel retail and artificial intelligence.

Asset/Liabilities & Current Ratio

Walmart’s asset to liability ratio of 1.49 indicates that the company has $1.49 in assets for every dollar in liabilities. This suggests that Walmart is in a strong financial position, as it has more assets than liabilities to meet its financial obligations.

Walmart’s current ratio of 0.85 indicates that the company has $0.85 in current assets for every dollar in current liabilities. This suggests that Walmart has enough liquid assets to meet its short-term obligations.

Valuation

Based on DCF analysis, WMT’s stock price is slightly overvalued. Note that in the analysis we take into consideration also the cash and cash equivalents and the total debt.

Currently, 29 analysts rate Walmart as a Buy, while 6 analysts consider it Overweight. 7 analysts maintain a Hold rating and the consensus rating is Buy.

The high price target is $210.00, and the low price target is $157.00.

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Disclaimer

Please note that I am not a licensed financial advisor and the information provided here should not be construed as financial advice. I am simply sharing my understanding of the topics based on my research and personal experiences. It is always advisable to consult with a qualified financial advisor before making any investment decisions.

The information I provide is based on publicly available sources and my own interpretations. I strive to provide accurate and up-to-date information, but I cannot guarantee the correctness or completeness of the information.

Any opinions expressed here are my own and do not necessarily reflect the views of any other individual or organisation.

Please use your own judgement and conduct your own research before making any investment decisions.