Publicação
Walmart equity valuation
| Resumo: | The objective of this thesis is to estimate the fair value per share of Walmart Inc. as of December 31, 2024. To address this, two complementary valuation approaches were applied: the Discounted Cash Flow model and a relative valuation based on market multiples. The Discounted Cash Flow analysis, incorporating forecasts of Walmart’s future cash flows and reflecting the company’s maturity stage, indicated a fair value approximately 45% below the observed market price at the reference date. The relative valuation, derived from peer group multiples, produced a similar result, suggesting that Walmart’s shares were trading at a premium of around 55% compared to their estimated fair value. Taken together, these results show that Walmart’s stock was priced above its estimated fair value at the end of 2024. Both the intrinsic and relative approaches pointed in the same direction, highlighting a gap between the company’s fundamentals and the market valuation. This gap suggests that the expectations incorporated into the stock price may not be sustainable given the firm’s maturity. Based on these findings, a sell recommendation is issued, as the valuation indicates downside potential relative to the share price as of December 31, 2024, as well as the possibility of future corrections in order for the share price to converge towards its intrinsic value. |
|---|---|
| Autores principais: | Estrangeiro, Filipe Miguel Ribeiro Ferreira |
| Assunto: | Walmart Inc. Valuation DCF Discounted Cash Flow -- Avaliação por múltiplos Valuation using multiples Avaliação Fluxos de Caixa Descontados Avaliação relativa |
| Ano: | 2025 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | ISCTE |
| Idioma: | inglês |
| Origem: | Repositório ISCTE |
| Resumo: | The objective of this thesis is to estimate the fair value per share of Walmart Inc. as of December 31, 2024. To address this, two complementary valuation approaches were applied: the Discounted Cash Flow model and a relative valuation based on market multiples. The Discounted Cash Flow analysis, incorporating forecasts of Walmart’s future cash flows and reflecting the company’s maturity stage, indicated a fair value approximately 45% below the observed market price at the reference date. The relative valuation, derived from peer group multiples, produced a similar result, suggesting that Walmart’s shares were trading at a premium of around 55% compared to their estimated fair value. Taken together, these results show that Walmart’s stock was priced above its estimated fair value at the end of 2024. Both the intrinsic and relative approaches pointed in the same direction, highlighting a gap between the company’s fundamentals and the market valuation. This gap suggests that the expectations incorporated into the stock price may not be sustainable given the firm’s maturity. Based on these findings, a sell recommendation is issued, as the valuation indicates downside potential relative to the share price as of December 31, 2024, as well as the possibility of future corrections in order for the share price to converge towards its intrinsic value. |
|---|