WMT - Embedded Expectations Analysis - 2020 10 06
Walmart, Inc. (WMT:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings with a 29.3x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about eCommerce profitability, their inventory levels, and the potential of FlipkartSpecifically, management may have concerns about rising labor costs and their current liquidity levels. They may also lack confidence in their ability to sustain membership income in Sam's Club, accelerate Scan & Go's market reach, and continue capturing portfolio opportunities. Moreover, they may have concerns about the potential of Flipkart wholesale, as well as the currency and regulatory headwinds surrounding it, and their ability to sustain eCommerce profitability. Management may also lack confidence in their ability to successfully execute curbside rollout and sustain general merchandise performance, food growth, and working capital. Additionally, they may have concerns about the reopening of some of their competitors, the slow performance of their back-to-school products, and the impact of their operating hours on their business. Finally, they may lack confidence in their ability to execute their contingency plans when shopping season comes up
Walmart is engaged in global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Argentina, Canada, Central America, Chile, China, India, Japan, Mexico and the U.K. The company's operations are conducted in three reportable segments: Walmart U.S., which is a mass merchandiser of consumer products, operating under the Walmart and Walmart Neighborhood Market brands, as well as walmart.com, jet.com and other eCommerce brands; Walmart International, which includes various formats divided into retail, wholesale and other categories; and Sam's Club, which is a membership-only warehouse club that also operates samsclub.com.
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