Intrinsic Value Walmart Inc. (WMT.SW)

• Previous Close: CHF107.68
• Intrinsic Value: n/a
• Upside potential: n/a%

Stock Valuation Context

Business Model And Market Position

Walmart Inc. is a global retail powerhouse operating across three key segments: Walmart U.S., Walmart International, and Sam's Club. The company's diversified retail footprint spans approximately 10,500 stores and e-commerce platforms under 46 banners in 24 countries, offering a vast array of products from groceries and consumables to electronics, home improvement, and financial services. Walmart's core revenue model relies on high-volume, low-margin sales, leveraging its massive scale to negotiate favorable supplier terms and maintain competitive pricing. The company has strategically expanded its omnichannel capabilities, integrating physical stores with digital platforms like walmart.com and Flipkart to capture growing e-commerce demand. As the world's largest retailer by revenue, Walmart holds a dominant position in the discount retail sector, competing primarily on price and convenience. Its extensive supply chain network and private-label brands further reinforce its cost leadership. The company's international operations provide geographic diversification, though the U.S. remains its largest market. Walmart's membership-based Sam's Club segment complements its traditional retail business, catering to bulk purchasers and small businesses. The company continues to invest in technology and logistics to enhance efficiency and customer experience, maintaining its edge in an increasingly competitive retail landscape.

Revenue Profitability And Efficiency

Walmart reported $648.1 billion in revenue for FY 2024, demonstrating its massive scale in the retail sector. Net income stood at $15.5 billion, with diluted EPS of $1.91. The company generated $35.7 billion in operating cash flow, highlighting strong cash conversion from operations. Capital expenditures were $20.6 billion, reflecting ongoing investments in store upgrades, e-commerce, and supply chain modernization to sustain long-term growth.

Earnings Power And Capital Efficiency

Walmart's earnings power is supported by its vast operational scale and efficient inventory management. The company maintains relatively stable margins despite its low-price positioning, benefiting from volume-driven economies of scale. Its capital efficiency is evident in its ability to generate substantial cash flows from operations, which fund both growth initiatives and shareholder returns while maintaining financial flexibility.

Balance Sheet And Financial Health

Walmart's balance sheet shows $9.9 billion in cash and equivalents against $61.3 billion in total debt, indicating manageable leverage for a company of its size and cash flow generation. The company's financial health remains strong, supported by consistent operating cash flows and access to capital markets. Its current liquidity position allows for continued investment in growth initiatives while meeting financial obligations.

Growth Trends And Dividend Policy

Walmart has demonstrated consistent revenue growth, supported by both physical store expansion and e-commerce penetration. The company paid a dividend of $1.74 per share in FY 2024, reflecting its commitment to returning capital to shareholders. Walmart's growth strategy balances investment in digital transformation with maintaining its core retail operations, aiming to capture market share across multiple retail formats and geographies.

Valuation And Market Expectations

With a market capitalization of approximately $1.45 trillion, Walmart trades at a premium reflecting its market leadership and defensive characteristics. The company's beta of 0.517 indicates lower volatility compared to the broader market, typical for a stable consumer staples retailer. Market expectations appear to balance Walmart's growth potential in e-commerce and international markets against the challenges of maintaining margins in a competitive retail environment.

Strategic Advantages And Outlook

Walmart's key strategic advantages include its unmatched scale, supply chain efficiency, and growing digital capabilities. The company is well-positioned to benefit from the ongoing convergence of physical and digital retail. Looking ahead, Walmart faces opportunities in international expansion, private label growth, and omnichannel integration, though it must navigate inflationary pressures and competitive threats from both traditional retailers and e-commerce specialists.

Sources

Company filings, Bloomberg