Its time to breakdown one of the most well-known names in America. Here is the breakdown of $WMT otherwise known as Walmart.
Current Price: $136.60
52/Wk High: $151.33
52/Wk Low: $102.00
Read below for the breakdown!
Walmart, one of the best-known names in the country, is a major retailer and wholesaler. Walmart is also continually building out its online presence.
Currently, $WMT operates through three core segments, which includes a Walmart US and online segment, Walmart International segment, and finally a Sams Club segment.
When breaking down the stock, the price itself can be broken down by segments according to TREFIS.
According to TREFIS (@trefis), 68.0% of Walmarts stock price is made up of the Walmart US segment. Secondly, 25.2% of the stock price is based on the Walmart International segment.
Moving into the final segments, 5.9% of the stock price is based on the Sam’s Club segment, and 0.8% is based on memberships and other sources of income.
Not only has $WMT done well throughout the pandemic, but the company has also been getting involved in separate business categories such as social media.
Due to the potential ban of TikTok, Walmart pounced on an opportunity to get in on a TikTok deal, and when last reported, Walmart and Oracle were set to gain a partnership total of 20% of the new TikTok Global (A spinoff entity of TikTok).
Digging into the most recent numbers, the results couldn’t have been much better, and Walmart delivered a solid Q2 beat.
For the second quarter, $WMT delivered an EPS of $1.56 beating the analyst’s consensus EPS estimate of $1.25. Not only that, but revenue also grew, coming in at $138 billion.
When exploring the balance sheet, the numbers couldn’t look any better and Walmart is a powerhouse.
When last reported Walmarts total debt level sat at a total of $52.091 billion but maintained a very good cash on hand level of $16.906 billion as of July 31st.
Given the solid numbers and continued growth throughout the pandemic, analysts have been more bullish than normal on $WMT.
Currently, the median price target for Walmart sits at $149.20/share, representing an overall potential gain of 9.14%.
Furthermore, the high price target sits at $175.00/share, representing a 28.02% upside, and a low price target of $130.00/share, representing a -4.90% downside.
On the downside, the big money is not as bullish on Walmart. Currently, only 28.85% of $WMT is owned by institutions. Top holders include State Street Global Advisors, BlackRock Institutional Trust, and The Vanguard Group.
When taking a look at the charts, it seems that $WMT could be flashing an opportunity. Currently, the six-month RSI sits at 50.10, which is neither good nor bad.
Secondly, the six-month MACD sits within a range of 1.21 down to .60, creating large downward momentum. Along with the beaten-down MACD, the six-month CCI sits at -64.21, and $WMT trades nearly 15 points off its highs.
Finally, $WMT is hitting its 50-day moving averages, and a potential bounce could send the stock higher, while a breakdown through them could create more downside.
It is also important to note that $WMT currently trades at a $387.4 billion market cap, a 21.68 times P/E ratio, and a low 5.12 times P/B ratio.
In short, $WMT looks like a solid pick if you are looking for a consistently growing stock during this pullback. Given the recent correction and the cheap technicals, I think Walmart is an excellent long term pick, especially given the quarterly dividend of $0.54.
In the short to mid-term, I expect high volatility, but an overall trend back to the upside if $WMT can bounce off its 50-day moving averages within the next few trading days.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply opinion based on independent research.