Wal-Mart Stores, Inc. (WMT) Buy or Sell Stock Guide

March 24, 2020

Are you looking for the analysis of Wal-Mart Stores, Inc. (WMT) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 6 reasons to buy and 6 reasons to sell WMT stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about WMT stock:

  • Is WMT a buy or a sell?
  • Should I sell or hold WMT stock today?
  • Is WMT a good buy / investment?
  • What are WMT analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy WMT stock:

1. Walmart is adapting very well to the changing consumer sentiment to compete with brick-and-mortar rivals and e-commerce giant Amazon. In this regard, the company has been taking several e-commerce initiatives. Walmart completed the acquisition of the Indian e-commerce company Flipkart in August 2018.

2. The company has maintained its leadership position in the US groceries business. Walmart's tie-up with Jet.com and Blue Apron shows the company's commitment to keeping competition at bay.

3. Walmart has a stable financial position. It has given good returns to the shareholders in the form of dividend payments and share buybacks.

4. WMT forward dividend yield is 2.08%, higher than the industry (0.65%) and sector (0.43%) forward dividend yields. See WMT forward dividend chart.

5. WMT average analyst rating is Buy. See WMT analyst rating chart.

6. WMT average analyst price target ($129.07) is above its current price ($112.53). See WMT price target chart.

Now that you understand the bull case, let’s look at the reasons to sell WMT stock (i.e., the bear case):

1. Walmart has been increasing investments in the highly competitive e-commerce market. However, the margins are coming down and the company might report lower margins in the coming quarters.

2. Walmart's return on investments might be low because of intense competition, trade wars, and also government regulations. Walmart also faces challenges due to the new e-commerce rules in India.

3. Walmart has always remained under pressure from the government agencies. Recently the company was criticized for the massive buyback which could be otherwise used to raise wages of its employees.

4. WMT quarterly revenue growth was 2.10%, lower than the industry and sector average revenue growth (4.22% and 2.34%, respectively). See WMT revenue growth chart.

5. WMT profitability is declining. The YoY profit margin change was -0.84 percentage points. See WMT profitability chart.

6. WMT forward P/E ratio is 20.97, and it’s high compared to its industry peers’ P/E ratios. See WMT forward P/E ratio chart.

Now let's look at the key statistics for WMT:

Metrics WMT
Price $118.64
Average Price Target / Upside $129.07 / 8.79%
Average Analyst Rating Buy
Forward Dividend Yield 1.90%
Industry Discount Stores
Sector Consumer Defensive
Number of Employees 2,300,000
Market Cap $323.28B
Forward P/E Ratio 20.94
Price/Book Ratio 0.62
Revenue (TTM) $523.96B
YoY Quarterly Revenue Growth 2.10%
Profit Margin 2.84%

What are your thoughts on WMT?

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