August 29, 2024
Top 10 Stock Walmart Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Walmart – Top 10 Stock in Dow Jones Industrial Average
Walmart is listed as a top 10 stock on August 29, 2024 in the market index Dow Jones because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Walmart on August 29, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Hypermarkets, Super Centers |
| Index | Dow Jones, Dividends USA, Human Rights, S&P US Consumer, S&P US Food & Beverage, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Walmart Strong Buy
| 360 METRICS | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| SENTIMENT | ||||||||
| SENTIMENT | 97 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Walmart are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Walmart. The consolidated Growth Rank has a good rank of 57, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 57% of competitors in the same industry. The consolidated Safety Rank at 51 means that the company has a financing structure that is safer than 51% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 97, which means that professional investors are more optimistic about the stock than for 97% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 41, meaning that the share price of Walmart is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 59% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 77, Walmart is better positioned than 77% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 57), a safe financing structure (Safety Rank of 51), and positive professional market sentiment (Sentiment Rank of 97), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Walmart compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (57% better than peers). The value rank could be the reverse reflection of that (43%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Walmart very positive
ANALYSIS: With an Obermatt Sentiment Rank of 97 (better than 97% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Walmart is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Walmart. Analyst Opinions are at a rank of 89 (better than 89% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 78, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Walmart. The Professional Investors rank is 89, which means that currently, professional investors hold more stock in this company than in 89% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 96 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 96% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 97 (more positive than 97% compared with investment alternatives), Walmart has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Walmart stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Walmart Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Walmart shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Walmart. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 75% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than 66% of comparable companies, indicating a low value concerning Walmart's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 19 which means that the stock price compared with what market professionals expect for future profit levels is higher than 81% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 25 is also low. Compared with invested capital, the stock price is higher than for 75% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Walmart's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Walmart? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Walmart only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Walmart Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Walmart shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Walmart. Profit Growth has a rank of 58, which means that currently professionals expect the company to grow its profits more than 58% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has a below the median rank of 43, which means that, currently, professionals expect the company to grow less than 57% of its competitors, and Capital Growth also has a lower rank of 32. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Walmart. ...read more
Safety Strategy: Walmart Debt Financing Safety above-average
| SAFETY METRICS | August 29, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 54 |
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| REFINANCING | ||||||||
| REFINANCING | 17 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 74 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 51 |
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ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company Walmart has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Walmart is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Walmart. Leverage is at a rank of 54, meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors. Liquidity is also good at a rank of 74, meaning the company generates more profit to service its debt than 74% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 17, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 83% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 51 (better than 51% compared with alternatives), Walmart has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Walmart. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Walmart Above-Average Financial Performance
| COMBINED PERFORMANCE | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 74 |
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| COMBINED | ||||||||
| COMBINED | 58 |
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ANALYSIS: With an Obermatt Combined Rank of 58 (better than 58% compared with investment alternatives), Walmart (Hypermarkets, Super Centers, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Walmart are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives). But they show above-average growth (Growth Rank of 57) and are safely financed (Safety Rank of 51, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 58, is a buy recommendation based on Walmart's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Walmart exhibits low value (Obermatt Value Rank of 41), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 57). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 51) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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