WMT - Embedded Expectations Analysis - 2021 07 12
Walmart, Inc. (WMT:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings with a 27.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about top-line growth, the impact of their divested international businesses, and their transition into an omnichannel business.Specifically, management may lack confidence in their ability to improve top-line growth across higher-growth markets, continue growing grocery market share, and sustain net sales growth, particularly in India and their China Sam's Club business. Moreover, they may be exaggerating the strength of their first-party retail business and overall U.S. business fundamentals. Furthermore, management may be concerned about the impact of their divested international businesses on net sales, the potential of the American Lighthouses initiative to lower domestic manufacturing costs, and the sustainability of their Canada business performance. Additionally, they may lack confidence in their ability to attract more customers and transition into an omnichannel business.
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.