Stock Analysis & Valuation Walmart Inc. (WMT.SW)

• Previous Close: CHF107.68
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	5.90	-95
Graham Formula	25.20	-77

Strategic Investment Analysis

Company Overview

Walmart Inc. (WMT.SW) is a global retail giant operating under three primary segments: Walmart U.S., Walmart International, and Sam's Club. With a presence in 24 countries and approximately 10,500 stores under 46 banners, Walmart is a leader in the specialty retail sector. The company offers a vast product range, including groceries, health and wellness products, consumer electronics, home improvement items, and financial services. Walmart's extensive e-commerce platforms, such as walmart.com and flipkart.com, complement its brick-and-mortar stores, ensuring a seamless omnichannel shopping experience. Headquartered in Bentonville, Arkansas, Walmart has a market capitalization exceeding $1.4 trillion, reflecting its dominant position in the consumer cyclical sector. The company's robust supply chain, economies of scale, and focus on low-cost leadership make it a formidable player in the global retail landscape.

Investment Summary

Walmart Inc. presents a compelling investment opportunity due to its strong market position, diversified revenue streams, and consistent financial performance. With a revenue of $648.1 billion and net income of $15.5 billion in FY 2024, the company demonstrates robust profitability. Walmart's low beta of 0.517 indicates relative stability compared to the broader market, making it an attractive option for risk-averse investors. The company's strong operating cash flow of $35.7 billion supports its dividend payments and capital expenditures. However, investors should be mindful of the competitive retail landscape, margin pressures from inflation, and the challenges of international expansion. Walmart's focus on e-commerce growth and supply chain efficiency positions it well for long-term success.

Competitive Analysis

Walmart Inc. maintains a competitive edge through its unparalleled scale, efficient supply chain, and low-cost leadership strategy. The company's vast store network and e-commerce capabilities enable it to serve a broad customer base effectively. Walmart's private-label brands and bulk purchasing power allow it to offer competitive pricing, a key differentiator in the retail sector. The company's investments in technology, such as automation and data analytics, enhance operational efficiency and customer experience. However, Walmart faces intense competition from both traditional retailers and e-commerce giants. Its ability to adapt to changing consumer preferences, such as the shift toward online shopping and sustainability, will be critical in maintaining its market leadership. Walmart's international segment, while diverse, also exposes it to geopolitical and currency risks.

Major Competitors

• Amazon.com Inc. (AMZN): Amazon is a dominant force in e-commerce and cloud computing, with a strong focus on innovation and customer convenience. Its Prime membership program and extensive logistics network give it a competitive edge. However, Amazon's higher pricing on certain goods compared to Walmart's everyday low-price strategy is a weakness. Amazon's diversification into cloud services (AWS) provides additional revenue streams, but its retail margins are thinner than Walmart's.
• Target Corporation (TGT): Target competes with Walmart by offering a curated selection of products with a focus on style and affordability. Its smaller store format and strong private-label brands appeal to urban and suburban shoppers. However, Target's smaller scale limits its purchasing power compared to Walmart. Target's e-commerce capabilities are robust but not as extensive as Walmart's.
• Costco Wholesale Corporation (COST): Costco operates on a membership-based model, offering bulk products at competitive prices. Its high customer loyalty and strong private-label brands are strengths. However, Costco's limited product selection and fewer locations compared to Walmart may restrict its appeal. Costco's focus on high-income households differentiates it from Walmart's broader demographic targeting.
• The Kroger Co. (KR): Kroger is a leading grocery retailer in the U.S., with a strong presence in fresh food and private-label products. Its focus on grocery gives it an edge in this segment, but its limited general merchandise offerings are a weakness compared to Walmart's diversified product range. Kroger's investments in digital and delivery services are improving its competitiveness.
• Alibaba Group Holding Limited (BABA): Alibaba is a major player in e-commerce, particularly in China, with platforms like Taobao and Tmall. Its strong digital ecosystem and logistics network are strengths. However, Alibaba's limited physical retail presence outside China is a weakness compared to Walmart's global store network. Regulatory challenges in China also pose risks.