Is Walmart A Safer Bet During The Current Coronavirus Turmoil?

by Trefis Team
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Walmart‘s (NYSE: WMT) stock was basically flat on March 9 when the stock markets saw their biggest sell-off since the 2008 crisis. This could have been due to the consumer spending trends setting up well for the retailer. However, the stock declined by 9% on Thursday, March 12, in another large market drop, on the rising fears of a global slowdown due to the rapid spread of Coronavirus. Going by the trends seen during the 2008 economic slowdown, it’s likely that Walmart stock will recover and potentially outperform the market as the crisis winds down. Walmart will mostly have the fear-led public stocking up essentials at its outlets (or through delivery) during this crisis. In this analysis, we take a look at how the company’s stock reacted to the economic crisis of 2008 and compare its performance with the S&P 500.

View our dashboard here: 2007-08 vs. 2020 Crisis Comparison: Walmart Stock Compared To the S&P 500

Walmart Stock versus S&P 500 Over 2020 Coronavirus/Oil Price War Crisis

  • Walmart stock declined by about 10% in this week and the stock is down almost 9% since February 1, after the WHO declared a global health emergency.
  • The S&P 500 declined by 16.5% this week and has fallen by 25% since February 1, after the global health emergency was declared by the WHO.

Walmart Stock versus the S&P 500 During 2007-08 Financial Crisis

  • WMT stock grew from levels of around $33 in October 2007 (pre-crisis) to levels of around $38 in March 2009. It should be noted that most other stocks bottomed out by this time. WMT stock then further grew to levels of about $42 in early 2010.
  • The S&P declined from levels of around 1540 in October 2007 to levels of around 760 in March 2009 and recovered to levels of 1120 by January 2010.
  • Through the crisis, WMT stock increased by as much as 13% from its approximate pre-crisis level. This marked an exception as the S&P fell by as much as 51% during the same period.
  • WMT stock further rose by 10% between March 2009 and January 2010. In comparison, the S&P rose by about 48% over the same period.

Conclusion

Walmart’s stock has declined after showing some resilience earlier this week during the recent market sell-off due to the Coronavirus/Oil Price War crisis. Going by trends seen during the 2008 slowdown as well, it’s likely that it could potentially outperform as the crisis winds down.

For more detailed charts and a timeline of the 2007-08 crisis, view our dashboard analysis 2007-08 vs. 2020 Crisis Comparison: Walmart Stock Compared To the S&P 500

 

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