Is Walmart Stock A Buy?

by Trefis Team
+11.58%
Upside
143
Market
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Trefis
WMT
Wal-Mart
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Walmart’s stock (NYSE: WMT), the world’s largest retailer operating discount stores, supercenters, neighborhood markets, and Sam’s Club warehouses, has grown by almost 3% over the last five trading days (one week) and currently stands at around $135. The company had a solid Q4 with same-store sales in the U.S. growing 8.6%, driving total revenue to $152 billion. This compares to a 7.3% growth from the year-ago top line and also stands 3% higher than the market estimates of $148.3 billion. The big-box retailer also announced its capital expenditure plans of investing $14 billion for the current year – including spending on its supply chain, automation, and wages. It should be noted that the broader S&P500 returned a marginal growth over the last five days. Now, is WMT stock poised to grow further? We believe the company remains fundamentally undervalued at about 25x consensus fiscal 2022 earnings and there could be room for more gains in the stock. Specifically, there is a 58% chance of a rise in Walmart’s stock over the next month (twenty-one trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on Walmart’s Stock Chances of Rise for more details.

Five Days: WMT 3.2%, vs. S&P500 0.9%; Outperformed market (8% likelihood event)

  • Walmart stock rose 3.2% over a five-day trading period ending 3/29/2021, compared to a broader market (S&P500) rise of 0.9%
  • A change of 3.2% or more over five trading days is an 8% likelihood event, which has occurred 209 times out of 2516 in the last ten years

Ten Days: WMT 2.4%, vs. S&P500 0.2%; Outperformed market (17% likelihood event)

  • Walmart stock rose 2.4% over the last ten trading days (two weeks), compared to broader market (S&P500) rise of 0.2%
  • A change of 2.4% or more over ten trading days is a 17% likelihood event, which has occurred 419 times out of 2500 in the last ten years

Twenty-One Days: WMT 5.2%, vs. S&P500 4.3%; Outperformed market (19% likelihood event)

  • Walmart stock rose 5.2% the last twenty-one trading days (one month), compared to the broader market (S&P500) rise of 4.3%
  • A change of 5.2% or more over twenty-one trading days is a 19% likelihood event, which has occurred 462 times out of 2458 in the last ten years

E-commerce is eating into retail sales, but this might be an investment opportunity. See our theme on E-commerce Stocks for a diverse list of companies that stand to benefit from the big shift.

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