Walmart Inc.'s (NYSE:WMT) Share Price Matching Investor Opinion
Walmart Inc.'s (NYSE:WMT) Share Price Matching Investor Opinion
With a price-to-earnings (or "P/E") ratio of 30.8x Walmart Inc. (NYSE:WMT) may be sending very bearish signals at the moment, given that almost half of all companies in the United States have P/E ratios under 16x and even P/E's lower than 9x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
Recent times have been pleasing for Walmart as its earnings have risen in spite of the market's earnings going into reverse. It seems that many are expecting the company to continue defying the broader market adversity, which has increased investors' willingness to pay up for the stock. If not, then existing shareholders might be a little nervous about the viability of the share price.
Want the full picture on analyst estimates for the company? Then our free report on Walmart will help you uncover what's on the horizon.Does Growth Match The High P/E?
Walmart's P/E ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than the market.
Taking a look back first, we see that the company grew earnings per share by an impressive 34% last year. The latest three year period has also seen a 21% overall rise in EPS, aided extensively by its short-term performance. Accordingly, shareholders would have probably been satisfied with the medium-term rates of earnings growth.
Looking ahead now, EPS is anticipated to climb by 15% per year during the coming three years according to the analysts following the company. Meanwhile, the rest of the market is forecast to only expand by 10% per annum, which is noticeably less attractive.
In light of this, it's understandable that Walmart's P/E sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
What We Can Learn From Walmart's P/E?
Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.
We've established that Walmart maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. It's hard to see the share price falling strongly in the near future under these circumstances.
It is also worth noting that we have found 1 warning sign for Walmart that you need to take into consideration.
Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
沃爾瑪公司(紐約證券交易所代碼:WMT)的市盈率(或 “市盈率”)爲30.8倍,目前可能發出了非常看跌的信號,因爲美國幾乎有一半的公司的市盈率低於16倍,甚至市盈率低於9倍也並不罕見。儘管如此,我們需要更深入地挖掘,以確定市盈率大幅上漲是否有合理的基礎。
沃爾瑪最近一直很高興,儘管市場的收益出現逆轉,但其收益卻有所增加。看來許多人預計該公司將繼續克服更廣泛的市場逆境,這增加了投資者購買股票的意願。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
想全面了解分析師對公司的估計嗎?然後,我們關於沃爾瑪的免費報告將幫助您發現即將發生的事情。增長與高市盈率相匹配嗎?
沃爾瑪的市盈率對於一家預計將實現非常強勁的增長,而且重要的是,其表現要好於市場的公司來說是典型的。
首先回顧一下,我們發現該公司去年的每股收益增長了令人印象深刻的34%。在最近三年期間,每股收益總體增長了21%,這在很大程度上得益於其短期表現。因此,股東可能會對中期收益增長率感到滿意。
根據關注該公司的分析師的說法,展望未來,預計未來三年每股收益將每年增長15%。同時,預計其餘市場每年僅增長10%,這明顯降低了吸引力。
有鑑於此,沃爾瑪的市盈率高於其他大多數公司是可以理解的。顯然,股東們並不熱衷於轉移可能着眼於更繁榮未來的東西。
我們可以從沃爾瑪的市盈率中學到什麼?
通常,我們傾向於將市盈率的使用限制在確定市場對公司整體健康狀況的看法上。
我們已經確定,沃爾瑪之所以保持高市盈率,是因爲其預測的增長將高於整個市場,正如預期的那樣。在現階段,投資者認爲,收益惡化的可能性不足以證明降低市盈率是合理的。在這種情況下,很難看到股價在不久的將來會強勁下跌。
還值得注意的是,我們發現了沃爾瑪的1個警告信號,你需要考慮。
當然,通過尋找一些優秀的候選人,你可能會找到一筆不錯的投資。因此,來看看這份增長記錄強勁、市盈率低的公司的免費名單吧。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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