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Analysis of the Walmart Inc company

Analysis of the Walmart Inc company

16 December 2020

Walmart Inc is an American company that operates the world’s largest wholesale and retail chain operating under the Walmart brand. The main regions of operation are the United States and Mexico, with a significant presence in Canada, South America, South Africa, China and Japan (also until October 2020, Walmart owned the ASDA network in the UK). At the moment, the company employs more than two million people. At the moment, the company’s capitalization is over $ 400B. The company ranks first in the Global Powers of Retailing ranking. Moreover, revenue of $ 548B is almost 10% of the total revenue of all 250 companies in this ranking.

The main competitors of the retailer are Costco Wholesale Corp, Home Depot Inc, Target Corp. However, it is safe to say that Walmart is a leader, and by a wide margin. After all, its annual revenue is 50% more than that of these companies combined.

Revenue: $ 135B Q3 (+ 5% compared to the same period of the previous year)

Operating Income: $ 5.8B Q3 (+ 23% compared to the same period of the previous year)

Net Income: $ 5.1B for Q3 (+ 54% compared to the same period of the previous year)

Earnings per share: $ 1.34, which is better than the forecast of $ 1.18

The main indicators of the company during the crisis have shown very good dynamics. 

Which allows us to say that Walmart Inc. is the company that has benefited from lockdowns.

Credit rating – AA

Business segment income:

Wal-Mart U.S. – 65.59%

Walmart International – 23.11%

Sam’s Club – 11.3%

EPS Forecast for the current quarter: $ 1.49

Investors have historically loved the company for its stable and growing dividend, which currently stands at around 1.5%. Moreover, Walmart is a dividend for aristocrats, that is, it pays dividends on a quarterly basis and constantly increases them. One of the risks for retail companies is low margins. But Walmart is quite successful in keeping this indicator at a good level.

Thus, #WMT is fundamentally a strong company with attractive dividends. However, at the moment, the company’s share price, according to our estimates, is slightly overpriced.

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