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Category: Stock Market and Walmart (WMT)
Date: 5 August 2020 Stock Price of Walmart: $131.64 We take a look at the 1st quarter 2021 earnings report of the world's largest bricks and mortar retail group, Walmart. Walmart employs roughly 2.2 million people and have over 11 200 stores across the globe. The group reported revenues of $134.6 billion and net income of $3.990 billion. Doesn't look like Covid-19 affected the group's earnings at at
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More than ever, the news this quarter is our amazing associates. They are rising to the challenge to serve our customers and our communities. I’m proud of how they’re adapting and performing. Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future - Doug McMillon President and CEO, Walmart"
About Walmart
What started small, with a single discount store and the simple idea of selling more for less, has grown over the last 50 years into the largest retailer in the world. Each week, nearly 265 million customers and members visit our more than 11,200 stores under 55 banners in 27 countries and eCommerce websites in 10 countries. With fiscal year 2018 revenue of $500.3 billion, Walmart employs over 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. It’s all part of our unwavering commitment to creating opportunities and bringing value to customers and communities around the world.
From our humble beginnings as a small discount retailer in Rogers, Ark., Walmart has opened thousands of stores in the U.S. and expanded internationally. Through innovation, we're creating a seamless experience to let customers shop anytime and anywhere online, through mobile devices and in stores. We are creating opportunities and bringing value to customers and communities around the globe. Walmart operates over 11,200 stores under 55 banners in 27 countries and eCommerce websites in 10 countries. We employ approximately 2.2 million associates around the world — 1.5 million in the U.S. alone.
Around the world, we help families save money so they can live better. We use our size and scale to provide access to high-quality goods and fresh, nutritious food at everyday low prices—while creating opportunities for our associates and small and medium-sized global suppliers. Led by President & CEO Judith McKenna, Walmart International has more than 5,900 retail units, operating outside the United States with 55 banners in 26 countries with more than 700,000 associates serving more than 100 million customers every week.
From our humble beginnings as a small discount retailer in Rogers, Ark., Walmart has opened thousands of stores in the U.S. and expanded internationally. Through innovation, we're creating a seamless experience to let customers shop anytime and anywhere online, through mobile devices and in stores. We are creating opportunities and bringing value to customers and communities around the globe. Walmart operates over 11,200 stores under 55 banners in 27 countries and eCommerce websites in 10 countries. We employ approximately 2.2 million associates around the world — 1.5 million in the U.S. alone.
Around the world, we help families save money so they can live better. We use our size and scale to provide access to high-quality goods and fresh, nutritious food at everyday low prices—while creating opportunities for our associates and small and medium-sized global suppliers. Led by President & CEO Judith McKenna, Walmart International has more than 5,900 retail units, operating outside the United States with 55 banners in 26 countries with more than 700,000 associates serving more than 100 million customers every week.
Overview of Walmart's 1st quarter 2021 earnings release
The data below refers to the latest quarter unless specified otherwise
- Revenue: $134.622 billion (up from $122.949 billion for the same quarter of the previous year)
- Revenue increased by 8.6% over the last 12 months
- Cost of sales: $102.026 billion (up from $93.034 billion for the same quarter of the previous year)
- Cost of sales increased by 9.7% over the last 12 months.
- Margin squeeze being experienced by Walmart is the group's revenues increased at a slower rate than their cost of sales
- Net income: $3.990 billion (up from $3.842 billion for the same quarter of the previous year)
- Diluted income per share: $1.40 (up from $1.33 for the same quarter of the previous year)
- PE ratio of Walmart: 23.5
- Diluted weighted number of shares outstanding: 2.849 billion (down from 2.886 billion for the same quarter of the previous year)
- Cash and cash equivalents: $14.930 billion
- Cash and cash equivalents per share: $5.24
- Cash and cash equivalents makes up 3.9% of Walmart's market capital
- Cash and cash equivalents makes up 6.4% of Walmart's total assets
- Receivables, net: $5.029 billion
- Receivables makes up 2.2% of Walmart's total assets
- Inventories: $41.2 billion
- Inventories makes up 17.2% of Walmart's total assets
- Stockholders equity in Walmart: $74.110 billion
- Stockholders equity per share in Walmart: $26.01
- So Walmart is trading at 5.1 times its stockholders equity per share which is just outside the expected range of between 2 and 4 times that most firms tend to trade at
- For some perspective the average price to book value of firms in the S&P 500 is 3.7
- Cash generated from operations: $7.017billion
- Cash generated from operations per share : $2.46
Walmart (NYSE:WMT) management commentary on the results and earnings guidance
The company’s net sales and operating results were significantly affected by the outbreak of COVID-19. Unprecedented demand for products across multiple categories led to strong top-line results. Certain incremental costs negatively affected operating income, including costs associated with enhanced wages and benefits as well as safety and sanitation
"More than ever, the news this quarter is our amazing associates. They are rising to the challenge to serve our customers and our communities. I’m proud of how they’re adapting and performing. Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future.” Doug McMillon President and CEO, Walmart
COVID-19 Response to Date
“The company’s approach to leadership through shared value has never been more evident than it is now. From associates to customers to communities, shareholders and more, Walmart is working hard to make a difference,” added McMillon.
Support for Associates
• Announced special cash bonuses to all hourly associates in the U.S. totaling approximately $755 million
• Accelerated payment of first-quarter MyShare bonuses of nearly $170 million
• Expanded pay temporarily by $2 per hour in U.S. fulfillment centers • Created COVID-19 Emergency Leave policy
• Implemented an option for associates to receive weekly access to earned wages
• Provided access to free telehealth appointments through Doctors on Demand
• Provided face masks and gloves
• Installed sneeze guards at checkouts and other points of sale
• Encouraged social distancing through signage, including floor markers and directional traffic arrows
• Launched a new Living Better video series
• Implemented remote working for office associates
Support for Customers
• Reduced store operating hours to enable enhanced cleaning and sanitizing
• Launched Express Delivery in the U.S. to allow customers the option of having their orders delivered to their door in under two hours • Expanded slot capacity in the U.S. for existing pickup and delivery services
• Expanded ship from store option temporarily for orders placed on Walmart.com to approximately 2,500 stores
• Expanded the SNAP online pilot to more states in the U.S. in coordination with the USDA
• Expanded curbside pharmacy pickup and mail-to-home options in the U.S.
• Launched a new concierge service at Sam’s Club to offer seniors and those most at-risk a contact-free service
• Introduced “Hero Hours” at Sam’s Club for those serving on the frontlines
• Launched same-day delivery through Sam’s Club in Mexico
• Expanded capabilities in Mexico to support the growth in demand for same-day delivery options
• Launched pickup in China
• Accelerated launch of a new chat service through PhonePe to enable conversations between users
• Expanded Scan & Go Mobile to most stores in the U.K. to encourage contact-free shopping
• Expanded online grocery capacity in the U.K.
• Launched contact-free grocery delivery in Canada
• Announced partnership between Flipkart and Uber to deliver everyday essentials to customers
Support for Communities
• Hired more than 235,000 new associates in the U.S. • Provided $35 million in philanthropic support
• Focused $10 million of philanthropic support to food security • Launched 139 COVID-19 testing sites in store parking lots with an additional 44 planned by the end of May
• Partnered with Salesforce and State Farm to provide face masks and shoe coverings to healthcare workers
• Waived or discounted rent payments for U.S. property partners for April and May
• Simplified the process to qualify for the company’s Supply Chain Finance Program
• Partnered with McKesson to distribute millions of gowns and coveralls to healthcare workers
• Donated 21 tons of fresh produce and flowers to first responders and healthcare workers through Sam’s Club
• Committed to donating $1 million through Sam’s Club to help small businesses meet financial gaps
• Partnered with Feeding America to launch ‘Fight Hunger. Spark Change’ online donations early
• Launched deliveries of food and supplies directly to hospital workers in Canada
• Donated 250 tons of food to more than 20,000 senior citizens in Mexico
• Created online priority shopping passes for those most at risk in the U.K.
"More than ever, the news this quarter is our amazing associates. They are rising to the challenge to serve our customers and our communities. I’m proud of how they’re adapting and performing. Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future.” Doug McMillon President and CEO, Walmart
COVID-19 Response to Date
“The company’s approach to leadership through shared value has never been more evident than it is now. From associates to customers to communities, shareholders and more, Walmart is working hard to make a difference,” added McMillon.
Support for Associates
• Announced special cash bonuses to all hourly associates in the U.S. totaling approximately $755 million
• Accelerated payment of first-quarter MyShare bonuses of nearly $170 million
• Expanded pay temporarily by $2 per hour in U.S. fulfillment centers • Created COVID-19 Emergency Leave policy
• Implemented an option for associates to receive weekly access to earned wages
• Provided access to free telehealth appointments through Doctors on Demand
• Provided face masks and gloves
• Installed sneeze guards at checkouts and other points of sale
• Encouraged social distancing through signage, including floor markers and directional traffic arrows
• Launched a new Living Better video series
• Implemented remote working for office associates
Support for Customers
• Reduced store operating hours to enable enhanced cleaning and sanitizing
• Launched Express Delivery in the U.S. to allow customers the option of having their orders delivered to their door in under two hours • Expanded slot capacity in the U.S. for existing pickup and delivery services
• Expanded ship from store option temporarily for orders placed on Walmart.com to approximately 2,500 stores
• Expanded the SNAP online pilot to more states in the U.S. in coordination with the USDA
• Expanded curbside pharmacy pickup and mail-to-home options in the U.S.
• Launched a new concierge service at Sam’s Club to offer seniors and those most at-risk a contact-free service
• Introduced “Hero Hours” at Sam’s Club for those serving on the frontlines
• Launched same-day delivery through Sam’s Club in Mexico
• Expanded capabilities in Mexico to support the growth in demand for same-day delivery options
• Launched pickup in China
• Accelerated launch of a new chat service through PhonePe to enable conversations between users
• Expanded Scan & Go Mobile to most stores in the U.K. to encourage contact-free shopping
• Expanded online grocery capacity in the U.K.
• Launched contact-free grocery delivery in Canada
• Announced partnership between Flipkart and Uber to deliver everyday essentials to customers
Support for Communities
• Hired more than 235,000 new associates in the U.S. • Provided $35 million in philanthropic support
• Focused $10 million of philanthropic support to food security • Launched 139 COVID-19 testing sites in store parking lots with an additional 44 planned by the end of May
• Partnered with Salesforce and State Farm to provide face masks and shoe coverings to healthcare workers
• Waived or discounted rent payments for U.S. property partners for April and May
• Simplified the process to qualify for the company’s Supply Chain Finance Program
• Partnered with McKesson to distribute millions of gowns and coveralls to healthcare workers
• Donated 21 tons of fresh produce and flowers to first responders and healthcare workers through Sam’s Club
• Committed to donating $1 million through Sam’s Club to help small businesses meet financial gaps
• Partnered with Feeding America to launch ‘Fight Hunger. Spark Change’ online donations early
• Launched deliveries of food and supplies directly to hospital workers in Canada
• Donated 250 tons of food to more than 20,000 senior citizens in Mexico
• Created online priority shopping passes for those most at risk in the U.K.
Fiscal 2021 full year guidance
Due to unprecedented variability in the macro environment brought on by COVID-19, the company is withdrawing financial guidance for fiscal year 2021. “The decision to withdraw guidance reflects significant uncertainty around several key external variables and their potential impact on our business and the global economy, including: the duration and intensity of the COVID-19 health crisis globally, the length and impact of stay-at-home orders, the scale and duration of economic stimulus, employment trends and consumer confidence,” said Brett Biggs, Walmart Inc. chief financial officer. “Our business fundamentals are strong, and our financial position is excellent. Customers trust us to deliver on our brand promise, and I’m confident in our ability to perform well in most any environment. While the short-term environment will be challenging, we’re positioned well for long-term success in an increasingly omni world.” added Biggs.
Due to unprecedented variability in the macro environment brought on by COVID-19, the company is withdrawing financial guidance for fiscal year 2021. “The decision to withdraw guidance reflects significant uncertainty around several key external variables and their potential impact on our business and the global economy, including: the duration and intensity of the COVID-19 health crisis globally, the length and impact of stay-at-home orders, the scale and duration of economic stimulus, employment trends and consumer confidence,” said Brett Biggs, Walmart Inc. chief financial officer. “Our business fundamentals are strong, and our financial position is excellent. Customers trust us to deliver on our brand promise, and I’m confident in our ability to perform well in most any environment. While the short-term environment will be challenging, we’re positioned well for long-term success in an increasingly omni world.” added Biggs.
Walmart (NYSE:WMT) stock price history
The image below obtained from Google, shows the stock price history of Walmart (NYSE:WMT) for the last 5 years. Its been a pretty solid run for Walmart shares over the last 5 years. 5 years ago the stock of Walmart was trading at $71 and its currently trading at $131.64 a stock. That's a healthy 41.9% return provided to Walmart stockholders over the last 5 years.
Walmart's stock is trading at a lot closer to its 52 week high of $125.38 than it is to its 52 week low of $96.53 which to us is a clear indication that the short term sentiment and momentum of Walmart's stock is overwhelmingly positive at this point in time
Walmart's stock is trading at a lot closer to its 52 week high of $125.38 than it is to its 52 week low of $96.53 which to us is a clear indication that the short term sentiment and momentum of Walmart's stock is overwhelmingly positive at this point in time
Walmart (WMT) stock vs Target (TGT) stock performance over the last 5 years
The image below shows the stock price history of Walmart (WMT) and Target (TGT) over the last 5 years. So which of the two retailers stock's performed better over the last 5 years? The summary below shows the stock price performance of Walmart (WMT) and Target (TGT) over the last 5 years:
The stock of Walmart has easily outperformed that of Target over the last 5 years.
- Walmart (WMT): 103.34%
- Target (TGT): 67.9%
The stock of Walmart has easily outperformed that of Target over the last 5 years.
Recent coverage of Walmart (WMT)
The extract below covers the latest regarding Walmart as obtained from Finance.Yahoo.com
Walmart (WMT) closed at $129.30 in the latest trading session, marking a -0.08% move from the prior day. This change lagged the S&P 500's 0.72% gain on the day. Elsewhere, the Dow gained 0.89%, while the tech-heavy Nasdaq added 1.47%.
Heading into today, shares of the world's largest retailer had gained 8.55% over the past month, lagging the Retail-Wholesale sector's gain of 10.77% and outpacing the S&P 500's gain of 5.85% in that time.
Investors will be hoping for strength from WMT as it approaches its next earnings release, which is expected to be August 18, 2020. On that day, WMT is projected to report earnings of $1.09 per share, which would represent a year-over-year decline of 14.17%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $133.97 billion, up 2.76% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.93 per share and revenue of $545.29 billion, which would represent changes of 0% and +4.07%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for WMT. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Read the full article here
Walmart (WMT) closed at $129.30 in the latest trading session, marking a -0.08% move from the prior day. This change lagged the S&P 500's 0.72% gain on the day. Elsewhere, the Dow gained 0.89%, while the tech-heavy Nasdaq added 1.47%.
Heading into today, shares of the world's largest retailer had gained 8.55% over the past month, lagging the Retail-Wholesale sector's gain of 10.77% and outpacing the S&P 500's gain of 5.85% in that time.
Investors will be hoping for strength from WMT as it approaches its next earnings release, which is expected to be August 18, 2020. On that day, WMT is projected to report earnings of $1.09 per share, which would represent a year-over-year decline of 14.17%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $133.97 billion, up 2.76% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.93 per share and revenue of $545.29 billion, which would represent changes of 0% and +4.07%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for WMT. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Read the full article here
Walmart (NYSE:WMT) stock valuation
So what do we believe Walmart stock is worth after their latest earnings report and their fiscal guidance provided? Based on their 1st quarter 2021 earnings report and their earnings guidance our valuation model provides a target (full value) price for Walmart stock at $98.70 a stock .
We therefore believe the stock of Walmart is overvalued at its current price.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $98.70. A good entry point into Walmart would therefore be at $88.80 or below. We expect the stock of Walmart to pull back from its current levels to levels closer to our target price (full value price) in coming weeks and months.
We therefore believe the stock of Walmart is overvalued at its current price.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $98.70. A good entry point into Walmart would therefore be at $88.80 or below. We expect the stock of Walmart to pull back from its current levels to levels closer to our target price (full value price) in coming weeks and months.
Next earnings release of Walmart (WMT)
It is expected that Walmart will release their 2nd quarter 2021 earnings report towards the end of August 2020