Walmart Share Price Forecast December 2021 – Time to Buy WMT?
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Shares of American multinational retail corporation Walmart (NYSE: WMT) are in the red today, after closing at $137.14 as of December 1st (22:52 EST). Walmart has thrived over the past six decades in an industry which is notoriously fickle. The company has been serving almost 250 million customers on a weekly basis, controlling costs and passing these savings to customers with low prices.
Walmart – Technical Analysis
According to Walmart’s financial statement, the market cap of the company is at $382.415 billion with total assets worth $244.851 billion. Revenue for 2020 was at $559.15 billion with a profit margin of 2.42% compared to $523.96 billion in 2019. It generated $7.7 billion, which easily covered the $4.6 billion of dividends for the first three quarters of this fiscal year.
Moving averages for Walmart such as Exponential Moving Average (10)(142.85), Simple Moving Average (10)(142.99), Exponential Moving Average (20)(144.31), Simple Moving Average (20)(145.77) and Exponential Moving Average (30)(144.72) are indicating a sell action. Oscillators such as Relative Strength Index (14)(30.23), Stochastic %K (14, 3, 3)(8.97), Commodity Channel Index (20)(−184.38), Average Directional Index (14)(26.80) and Awesome Oscillator(−2.92) are neutral.
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Recent Developments
Walmart has transformed itself from a brick-and-mortar set of stores to an omnichannel retailer. The company wants to enter the e-commerce technology market with a partnership with Adobe. Employees at Walmart are well versed in dealing with curbside pickup, in-store pickup, communicating with customers about when an order will be ready and handling substitutions. With an e-commerce solution, the company will allow small and medium-sized retailers to offer these same services.
Last year Walmart’s Marketplace saw products from about 70,000 third part sellers being sold. This number increased to 100,000 by the middle of 2021. With the new project, Walmart wishes to combine the aggregation of Amazon’s Marketplace with Shopify’s e-commerce solutions. Right now, the company’s operating margin last quarter was just over 4% since it relies heavily on its physical stores. Though Walmart’s e-commerce solution isn’t expected to go live until next year, that’s just a couple of months away. Only a ten per cent share of the e-commerce market will let Walmart tap into the $4.4 billion market.
Walmart is working on offering its logistics business as a service called GoLocal which allows businesses of all sizes to gain access to Walmart’s vast delivery network. It has also spent more than three years converting 3000 stores into mini-fulfilment centres, with future plans in place to add modular warehouses within. The addition of these centres will provide Go Local with more points to deliver from. While the revenue cannot be predicted at this point, GoLocal has already entered into agreements with national retail clients and will be used by Home Depot in certain markets.
Should You Buy WMT Shares?
Walmart’s efforts to transform its business involves its e-commerce and logistics as services. Apart from this, investors have also other reasons to be excited, such as the retailer’s collaboration with Ford (NYSE: F) and Lyft (NASDAQ: LYFT) for developing autonomous delivery. Among other developments, Walmart has also made an investment in DroneUp for drone delivery.
Walmart has always been known as a dividend aristocrat, delivering increasing dividends every year since declaring its first payment in 1974. The shares seem to offer investors a good value with a P/E ratio of 21. Investors are paying less for the shares at the moment even as the company is expanding. Considering this, one can easily add WMT shares to their portfolio at the moment.
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