Detailed Financial Analysis and Stock Valuation of Walmart Inc.

This report provides a financial analysis of Walmart Inc. (WMT) stock, traded on the New York Stock Exchange. It examines the current share price against the estimated intrinsic value, calculated using the industry average Price-to-Earnings (P/E) ratio and the company's Earnings Per Share (EPS). The an...Read More

Running head: FINANCIAL MANAGEMENT
Financial Management
Name of the Student:
Name of the University:
Author’s Note:

1FINANCIAL MANAGEMENT
Table of Contents
Financial Analysis of Walmart...................................................................................................2
Question 1..................................................................................................................................2
Question 2..................................................................................................................................2
Question 3..................................................................................................................................2
References..................................................................................................................................4

2FINANCIAL MANAGEMENT
Financial Analysis of Walmart
The company selected for the purpose of the analysis is Walmart Incorporation which
is listed in the New York Stock Exchange with its ticker symbol as “WMT”. The current
share price of the company is around $98.47 (MSN Money, 2019).
The estimate for the Earnings Per Share of the Company by Analyst is forecasted to
be around $4.74. The current price to earnings ratio for the industry where the company
operates is around 28.74 times. In order to determine the right price of the stock the current
industry average P/E ratio of 28.74 times will be multiplied with the earnings per share of the
stock which is around $3.38 per share. The Earnings Per Share was calculated by taking the
net income of the company divided by the total outstanding shares (NI/Outstanding Shares) =
(9.86Bn/24.95Bn). Therefore intrinsic price of the stock is: ($3.38*28.74) = $97.38.
Question 1
Share Price of the Walmart Company can be regarded as overvalued as the intrinsic
value of the stock is around $97.38 and the current share price of the company is around
$98.47 which shows overvaluation but not at a significant gap or percentage (Vogel, 2014).
Question 2
The recommendation given by the analysts for the particular stock is to hold the task
which was based on the profitability and the financial condition and financial performance of
the company.
Question 3
Yes we agree with the recommendation given by the analyst for holding the stock as
the financial performance of the company has been a bit volatile with the net profit margin of
the company showing a slight downward trend and rich valuation of the company. Investors

3FINANCIAL MANAGEMENT
and Institute should hold the stock and analyse various other factors and conditions that are
influencing the operations of the company.

4FINANCIAL MANAGEMENT
References
WMT - Stock quote for Walmart Inc - MSN Money. (2019). Retrieved from
https://www.msn.com/en-us/money/stockdetails/fi-126.1.WMT.NYS?
symbol=WMT&form=PRFIMQ
Vogel, H. L. (2014). Entertainment industry economics: A guide for financial analysis.
Cambridge University Press.