WMT – Market expectations are for stable Uniform ROAs, but management may have concerns about costs, pricing, and employment

May 27, 2022

  • Walmart (WMT) currently trades near corporate and historical averages relative to Uniform earnings, with a 22.4x Uniform P/E (Fwd. V/E’).

  • At these levels, markets are pricing in expectations for Uniform ROA to sustain current levels, accompanied by 3% Uniform asset growth.

  • Similarly, analysts expect Uniform ROA to remain near current levels through 2024, accompanied by 1% Uniform asset growth.

  • If sustained going forward, these levels would imply a stock price closer to $106, representing approximately 11% equity downside for the firm.

  • Moreover, the firm’s most recent earnings call suggests management may have concerns about costs, pricing, and employment.

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