Business & Investment

Is Wal-Mart in stock too high?



Walmart Inc (NYSE: WMT) shares have fallen in recent weeks, despite strong third-quarter earnings reports in November. In the third quarter, roadside retailers reported revenues of $ 134.7 billion during the period, exceeding analysts’ expectations of $ 132.2 billion. Adjusted earnings per share was $ 1.34, breaking the $ 1.18 that Wall Street was looking for.

A major reason for the company’s excellent performance is that e-commerce sales increased 79% as consumers continued to spend money online rather than in-store during the coronavirus pandemic.

However, despite the first recovery after the earnings announcement, Wal-Mart’s stock fell in December and is now trading lower than it was before the company released its latest figures.

One of the reasons investors are currently a little hesitant to invest in Wal-Mart is that they will see a 21% rise in 2020 and their price-earnings ratio will be trading in multiples of 25. It has grown only at a rate of 1.9% in the most recent fiscal year. Also, the price-earnings ratio (PEG) multiple is close to 4.0, so the business isn’t growing fast enough to justify this type of price tag. Investors usually look for PEGs below 1.0.

Wal-Mart has benefited from this year’s surge in online shopping and shutdowns, where people shop at large retail stores and limit the number of trips, which tends to be unlikely to last in the long run. .. Wal-Mart’s stock price could fall very well in 2021, and investors may be rethinking Wal-Mart’s stock price today, especially as vaccine deployments and livelihoods have begun to return to normal.

Is Wal-Mart in stock too high?

http://www.baystreet.ca/articles/stockstowatch.aspx?id=9383 Is Wal-Mart in stock too high?

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