Walmart (WMT) reported a disappointing quarterly earnings report, amid mounting macroeconomic headwinds. However, the company is making several strategic advances to meet industry-wide challenges. So, we think it might make sense to buy the stock now. read on.
Mega-retailer Walmart Inc. shares of (wmt) are down 119% over last year and 16.6% year-over-year to close yesterday’s trading session at $120.69. The recent price drop can be attributed to the company’s poor first quarter results.
WMT’s operating income declined 23% year-over-year to $5.3 billion due to unfavorable economic conditions. The overall retail industry has been badly affected by rising inflation, limited inventories and labor shortage.
However, Baird analyst Peter Benedict A Buy Rating Confirmed Set a further price target of $155 for WMT stock, which indicates a potential upside of 29.8% from current levels. The analyst believes that “WMT is investing from a position of strength, and the move in capex should expand WMT’s omnichannel leadership in the market and enable faster (and more profitable) growth in the medium/long term.” should be promoted.”
Here’s what could shape WMT’s performance in the near term:
Last month, Symbiotic LLC, a game-changing artificial intelligence-powered supply chain technology startup, and WMT launched an expanded commercial to integrate Symbiotic’s robotics and software automation platform into all 42 of Walmart’s regional distribution facilities over the next several years. Partnership announced. This builds on Walmart’s pledge to install the Symbiotic system in 25 regional distribution centers.
impressive growth prospects
Street expects WMT revenue and eps Fiscal 2024 grew 3.4% and 8.6% year-on-year to $616.02 billion and $6.97. Further, the EPS of WMT is expected to grow at a CAGR of 9.5% over the next five years. In addition, the company has an impressive earnings history, as it topped Street EPS estimates in three of the past four quarters.
In terms of forward price/cash flow, the stock is currently trading at 10.69x, which is 17% lower than the industry average of 12.88x. Also, it has a forward EV/sales of 0.68x which is 62.9% lower than the industry average of 1.82x. Additionally, the WMT futures price/sell of 0.56x is 53.9% lower than the industry average of 1.21x.
Consensus ratings and price targets indicate potential upside
Of the 27 Wall Street analysts who evaluated WMT, 22 rated it as buy and five as hold. The 12-Month Average Price Target of $157.27 indicates a 30.3% Potential Upside, The price target is from the $134.00 low to $181.00 high.
Power rating shows solid prospects
WMT has an overall grade of B, which is equivalent to the Buy rating we own power rating Arrangement The POWR rating is calculated considering 118 different factors, each factor weighted to an optimum degree.
Our proprietary rating system also evaluates each stock based on eight different categories. WMT has a B grade for stability which is reasonable given the stock beta of 0.51.
Out of 38 stocks in A-rated Grocery/Big Box Retailer Industry, WMT is ranked #13.
In addition to what I said above, we have graded WMT for Sentiment, Growth, Quality, Value and Momentum. Get all WMT ratings Here,
WMT’s growing online presence and diverse strategic alliances will boost its operational performance. As new consumer behaviors related to online shopping are expected to be tolerated, the firm is well positioned to serve its expanding customer base and drive commercial growth. Furthermore, given favorable analyst sentiment and the company’s solid growth prospects, we think the stock could be a solid investment now.
How does Walmart (WMT) stack up against its peers?
WMT has an overall POWR rating of B, which is equivalent to a Buy rating. Check out these other stocks within the same industry with an A (strong buy) rating: Natural Grocers by Vitamin Cottage Inc. ,NGVC), Ingalls Markets Inc. ,IMKTA), and Albertsons Companies Inc. ,ACI,
Shares of WMT rose $0.33 (+0.27%) in premarket trading on Thursday. Year-on-year, the WMT is down -15.73%, while the benchmark S&P 500 index has gained -20.26% during the same period.
About the Author: Pragya Pandey
Pragya is an Equity Research Analyst and Financial Journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a second tier candidate.
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