Overview of Walmart Inc & Intrinsic value calculation
Walmart Inc is a people led technology powered omni channel retailer dedicated to helping people around the world save money and live better, by providing the opportunity to shop in both retail stores and through e-commerce. Each week Walmart serve approximately 255 million customers who visit more than 10500 stores and numerous ecommerce websites in 19 countries.
Everyday low price(EDLP) is the cornerstone of Walmart strategy. From grocery and entertainment to sporting goods and crafts Walmart provide deep assortment that its customers appreciate. whether they're shopping online at Walmart.com, through one of Walmart mobile apps or shopping in a store.
During the year 2024 Walmart Inc reported total revenues of $648 billion and net income generated of $16 billion. Walmart Inc. common stock trades on the New York Stock exchange under the symbol WMT .
FCFE Details of Walmart Inc. shown below, US$ in millions, except per share data
|
Year |
Value |
FCFE or Terminal Value |
Present Value at 9.3% |
|
0 |
FCFE0 |
21,848 |
21,848 |
|
1 |
FCFE1 |
24,478 |
19,500 |
|
2 |
FCFE2 |
27,036 |
20,066 |
|
3 |
FCFE3 |
29,440 |
20,940 |
|
4 |
FCFE4 |
31,584 |
22,222 |
|
5 |
FCFE5 |
33,398 |
20,632 |
|
5 |
Terminal Value (TV5) |
992,283 |
149,213 |
|
Intrinsic value of Walmart INC |
$761,322 |
|
Market cap of Walmart INC |
$653.323 Billion |
|
Intrinsic value of Walmart INC common stock (per share) |
$94.64 |
|
Current share price on 10/15/2024 |
$81.59 |
Required rate of Return
Assumptions
|
Rate of return on LT Treasury Composite(Rf) |
4.36% |
|
Expected rate of return on market portfolio(E(RM) |
13.81% |
|
Systematic risk of Walmart Inc. Common stock (β) |
0.52 |
|
Required rate of return on Intuit Inc. Common Stock (r) Calculation : Rf + β(E(RM)- (Rf) = 4.36% +0.52[13.81% - 4.36%] |
9.27% |
FCFE Growth rate (G) Forecast
Walmart INC. H-Model
|
Year |
Value |
g |
|
1 |
g1 (PRAT Model) |
12.04% |
|
2 |
g2 (Linear Interpolation) |
10.45% |
|
3 |
g3 (Linear Interpolation) |
8.9% |
|
4 |
g4 (Linear Interpolation) |
7.28% |
|
5 |
g5 (Single stage model) |
5.74% |
2023 Calculations
|
Retention rate |
62.26% |
|
Gross Profit Margin |
24.37% |
|
Profit margin |
2.5% |
|
Asset turnover |
2.57% |
|
Financial leverage |
3 |
|
Return on Invested Capital |
13.72% |
|
EPS |
1.92 |
|
PE Ratio |
42.53 |
Sources : Form 10K of Walmart INC for the fiscal year 2024, https://corporate.walmart.com/ https://stock.walmart.com/financials/annual-reports/default.aspx, https://www.stock-analysis-on.net/ , https://finance.yahoo.com/ , https://companiesmarketcap.com/
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