Why Walmart (WMT) is a Top Growth Stock for the Long-Term (2024)
Zacks Equity Research
·2 min read
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.
While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.
Why This 1 Growth Stock Should Be On Your Watchlist
Different than value or momentum investors, growth-oriented investors are concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, they'll want to focus on the Growth Style Score, which analyzes characteristics like projected and historical earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Walmart (WMT)
Walmart Inc. has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player. In this regard, acquisitions; partnerships; delivery programs like Walmart + and Express Delivery; and investment in online e-commerce platform Flipkart are noteworthy. These position the company to keep pace with the changing retail ecosystem and stay firm in the presence of rivals like Amazon and Target. Markedly, Walmart’s product offerings include almost everything from grocery to cosmetics, electronics to stationery, home furnishings to health and wellness products, and apparel to entertainment products, to name a few.
WMT boasts a Growth Style Score of A and VGM Score of A, and holds a Zacks Rank #3 (Hold) rating. Its bottom-line is projected to rise 6.3% year-over-year for 2025, while Wall Street anticipates its top line to improve by 3.6%.
Nine analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.03 to $2.36 per share. WMT boasts an average earnings surprise of 7.3%.
Looking at cash flow, Walmart is expected to report cash flow growth of 6% this year; WMT has generated cash flow growth of 3.5% over the past three to five years.
Investors should take the time to consider WMT for their portfolios due to its solid Zacks Rank rating, notable growth metrics, and impressive Growth and VGM Style Scores.
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Walmart is also cash rich. The company has generated cash flow growth of 3.5%, and is expected to report cash flow expansion of 6% in 2025. WMT should be on investors' short lists because of its impressive growth fundamentals, a good Zacks Rank, and strong Growth and VGM Style Scores.
Walmart isn't known for its impressive profit margins, but the chain's earnings power is improving. Operating income spiked in the past year and is projected to outpace revenue again in 2024. It's great news for the business, meanwhile, that these gains arrived even as the company cuts prices amid strong sales growth.
WMT is a Zacks Rank #2 (Buy) stock, with a Value Style Score of B and VGM Score of A. Shares are currently trading at a forward P/E of 25X for the current fiscal year compared to the Retail - Supermarkets industry's P/E of 12.3X. Additionally, WMT has a PEG Ratio of 3.8 and a Price/Cash Flow ratio of 15.9X.
According to the latest long-term forecast, Walmart price will hit $80 by the end of 2024 and then $85 by the middle of 2025. Walmart will rise to $90 within the year of 2026, $100 in 2027, $110 in 2028, $125 in 2029 and $150 in 2032.
The company's resilience, innovative strategies and steady expansion make it a brilliant investment in the long term. Perfect for those who want growth and stability in times of high inflation and expensive prices. Walmart stock could be a valuable addition to your 2024 portfolio.
The company's resilience, innovative strategies and steady expansion make it a brilliant investment in the long term. Perfect for those who want growth and stability in times of high inflation and expensive prices. Walmart stock could be a valuable addition to your 2024 portfolio.
Harvesting enough wind, solar and other energy sources to power our facilities with 100% renewable energy by 2035. We power around 36% of our operations with renewable energy. Zeroing out emissions from all of our vehicles, including long-haul trucks, by 2040.
The 28 analysts with 12-month price forecasts for Walmart stock have an average target of 63.05, with a low estimate of 54.33 and a high estimate of 76. The average target predicts an increase of 5.40% from the current stock price of 59.82.
With its 2-star rating, we believe Walmart's stock is overvalued compared with our long-term fair value estimate, which we have raised to $50 per share from $49 following its most recent earnings report and 3-for-1 stock split, primarily due to the time value of money.
Walmart has a volatility of 0.88 and is 1.4 times more volatile than NYSE Composite. 7 percent of all equities and portfolios are less risky than Walmart. You can use Walmart to enhance the returns of your portfolios. The stock experiences a large bullish trend.
Walmart stock outperformed the S&P 500 during the past two big recessions (2020 and 2008-09). In 2020, during the start of the COVID-19 pandemic, it outperformed the S&P 500 by five percentage points.
There's a reason Walmart is the biggest brick-and-mortar name in the business. This old-school retailer is more cutting-edge than most investors may realize. Investors looking for reliability over growth potential would be wise in owning Walmart.
The more time your money stays invested, the greater the opportunity for compounding and growth. Keep in mind that while compounding, overall, can have a significant long-term impact, there may be periods when your money won't grow.
The case for investing in stocks. Equities can add diversification and serve as a growth engine to help build value over time: Higher growth potential — Equities serve as a cornerstone for many portfolios because of their potential for growth.
How the Walmart Effect Works. The Walmart Effect also has its positive benefits; it can curb inflation and help to keep employee productivity at an optimum level. The chain of stores can also save consumers billions of dollars but may also reduce wages and competition in an area.
Introduction: My name is Annamae Dooley, I am a witty, quaint, lovely, clever, rich, sparkling, powerful person who loves writing and wants to share my knowledge and understanding with you.
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