NYSE:WMT
$53.97
(3/11 4:30PM)
+0.6%
| Open | $53.64 |
Mkt Cap | $204.3 Billion |
| High | $53.99 |
52Wk High | $55.20 |
| Low | $53.52 |
52Wk Low | $47.35 |
| Volume | 10.7 Million |
Avg Vol 10D | 12.2 Million |
WMT Stock Evaluation
As of the time of this report, there has been relatively little movement in price for WMT over the last week. Furthermore, there has been no revision to earnings expectations or guidance. Given these factors as well as those contained in our complete analysis, we do not have enough of a catalyst to necessitate a rating change. For more detail please read the rest of our analysis of WMT's valuation.
Recommendation Summary
At Ockham Research, we are always interested in understanding a company from a valuation standpoint, but even the most ardent value investor understands that there is more to the picture than simply valuation. So, we also apply a volatility studies for both the index and individual sectors. We utilize these tools in order to get a more complete picture of the investing environment. So, while most of our report highlights current valuation versus historical norms as well as peer analysis, there is still more going on behind the scenes.
The NYSE has achieved some pretty solid gains in the last twelve months. Interestingly, in regards to WMT, the Consumer Services sector has actual outperformed the NYSE over this intermediate time period. We believe our Undervalued is still justified by our analysis of historical valuation metrics and our volatility study as well as our sector and peer analyses.
First, WMT increased in price by 0.13% since 02/27/2010 and this does not greatly impact our outlook.
Second, since our last report, there have been no significant adjustments in earnings expectations or guidance.
WMT Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, WMT the high and low end of the Price to Sales per share ratios are 0.79x and 0.62x respectively.
Notice that WMT's current Price to Sales per share ratio is 0.51x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $54.14, WMT is 29% below where we would expect to see it. This will beneficially factor into our final analysis of WMT as it is not often that this stock sinks to these levels.
WMT Cash Earnings
As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently WMT is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for WMT, the current level of Cash Earnings compared to its historical levels helps identify where WMT is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 15.92 and a historical low Cash Earnings per share ratio of 12.53, an investor can relate where value becomes optimal.
So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for WMT? From the Ockham perspective, we are looking specifically at WMT to see if the market is recognizing the huge disparity between WMT's past stock price to Cash Earnings ratio to today's levels. At a difference of 31% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at WMT. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.
WMT Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for WMT to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for WMT is $1.09 producing a current dividend yield of 2.01%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from WMT against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from WMT over previous years was 2.30% while the lowest dividend yield was 0.47%. If you are looking for some “bang for your buck” then a dividend yield of 45.13% above the historical median should be enticing. WMT receives a positive boost in our view because as you know, equity at its core is simply a claim on future dividends.
WMT Gets Mentioned in the Financial Media
Wal-Mart Stores, Incorporated is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Closing Bell.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Wal-Mart Stores, Incorporated will perform just about the same as the index. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, WMT has been less covered in the news compared to the rest of our universe of stocks. We consider WMT as Undervalued at the current price of $53.94. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.
“… WALMART, hewlett-packard and cisco all trading higher and even though the dow's only up 27 points. These stocks doing pretty well. > > > …”
Interested in WMT? See What the Pundits Said on Power Lunch
Wal-Mart Stores, Incorporated is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Power Lunch.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards WMT and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Wal-Mart Stores, Incorporated has actually sunk a bit in comparison to the others. At present, Ockham has a valuation stance of Undervalued on WMT, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… WALMART. > > guy is short game stop and long parenting. > > here's what's coming up on "fast at five. " getting too hot to handle? …”
Asia Confidential Brings News Related to Wal-Mart Stores, Incorporated
The latest news from Asia Confidential on WMT is available through Ockham's news analytics platform RazorWire.
At present, Ockham has a valuation stance of Undervalued on WMT, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards WMT and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Wal-Mart Stores, Incorporated has actually sunk a bit in comparison to the others.
“… WALMART, apple at $203, and berkshire hathaway at $202. 90 billion. Apple has the products to drive the profit growth. Berkshire is slow and steady. …”
Notice a Discussion Covering WMT Appeared Recently in the Financial News
Wal-Mart Stores, Incorporated is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on The Trade.
Based on our methodology, Wal-Mart Stores, Incorporated should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; WMT has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… WALMART, apple at $203, and berkshire hathaway at $202. 90 billion. Apple has the products to drive the profit growth. Berkshire is slow and steady. . …”
News Breaking on Wal-Mart Stores, Incorporated on Asia Morning Call
As always, the latest news on WMT is available to Ockham clients through RazorWire, and it was mentioned recently on Asia Morning Call.
Based on our methodology, Wal-Mart Stores, Incorporated should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; WMT has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… The yellow line is WALMART. We will get to that in the moment. The other line is apple. WAL-MART is actually the biggest. Apple is to one to $3. 9 billion. …”
Short Sellers and WMT Discussed on Closing Bell
No matter if you are long Wal-Mart Stores, Incorporated, it pays to understand the reason that some are shorting it. Wal-Mart Stores, Incorporated and shorts were a topic covered on Closing Bell.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Wal-Mart Stores, Incorporated will perform just about the same as the index. We consider WMT as Undervalued at the current price of $53.72. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, WMT has been less covered in the news compared to the rest of our universe of stocks.
“… And now that apple's market cap matches that of WALMART, is the stock to own for the decade? Is it really worth owning for the next decade? …”
Wal-Mart Stores, Incorporated Dividend News from Street Smart With Carol Massar and Matt Miller
Dividends are a management decision and can be seen as a signal of strength or weakness depending on the latest news. RazorWire captured a discussion of WMT's dividends recently on Street Smart With Carol Massar and Matt Miller.
Based on our methodology, Wal-Mart Stores, Incorporated should hold some appeal to value investors as we view it as Undervalued. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. We noticed recently that in comparison to all other stocks we analyze in the news; WMT has received less coverage from the financial media in business television and blogs.
“… WALMART is bringing back that 300 items to u. S. Stores. The products include certain flavors and package sizes of food. Bloomberg news has learned that citigroup may pay an ... …”
Street Signs Has News on WMT
News has broken via the television and viral blogs regarding WMT, so investors should take an interest in learning what was said.
Based on our methodology, Wal-Mart Stores, Incorporated should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; WMT has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… it's not value like liberty of london, by the way is now going to be at target or WALMART? I don't remember which one. > > …”
WMT's EPS discussed on Tech Trader Daily-Barron's
Whenever news breaks regarding earnings or earnings per share data, we pay close attention.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, WMT has been less covered in the news compared to the rest of our universe of stocks. We consider WMT as Undervalued at the current price of $53.80. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Wal-Mart Stores, Incorporated will perform just about the same as the index.
“… On WAL-MART. com (WMT), the same phone will run you just $29. 99. C. L. King analyst Lawrence Harris, who pointed out the lower prices in a research note today, has chopped ... …”
Undervalued or Overvalued? Power Lunch Takes on WMT's Valuation
Power Lunch mentions some valuation metrics in regards to WMT; have a read at what they think from Ockham's RazorWire.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, WMT has been less covered in the news compared to the rest of our universe of stocks. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Wal-Mart Stores, Incorporated will perform just about the same as the index. We consider WMT as Undervalued at the current price of $53.72. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.
“… Only three other members, ex-con, WALMART and berkshire. Not exactly a mover like apple. Does the size, joe, at this point concern you? …”