WMT completed a head and shoulder pattern without any substantial pullback in July. WMT is currently at the average analysts 12 months target of $81. However, according to Trefis and CFRA, the fair value of WMT is approximately 5% to 7% lower. A meaningful pullback of 10% to the 200 day moving average would not be unreasonable should investors be displeased with the next earnings report on August 17. Investors have not seen any meaningful increase in earnings during the past 5 years.
Earnings estimates for 2017 are 4.32 with the 2018 estimate of 4.36 giving minimal increase. Based on an average PE ratio over the last 5 years of 15.15 a share price of $66 is not unreasonable and would return the stock back to the lows seen earlier this year.
Long term earnings growth projections for WMT are 5.8% annually over the next 5 years. Valueline suggests long term investors can expect this as a minimum 3-5 year annual total return projection.
Earnings estimates for 2017 are 4.32 with the 2018 estimate of 4.36 giving minimal increase. Based on an average PE ratio over the last 5 years of 15.15 a share price of $66 is not unreasonable and would return the stock back to the lows seen earlier this year.
Long term earnings growth projections for WMT are 5.8% annually over the next 5 years. Valueline suggests long term investors can expect this as a minimum 3-5 year annual total return projection.
Note
Kevin Downing writes in the July 28, 2017 commentary for Valueline: "The Amazon threat is intensifying. If Amazon’s bid to purchase Whole Foods is
successful, the e-tailer would gain its long sought after physical presence in the grocery space. Too, Amazon is set to provide discounted Prime memberships to individuals on government assistance, probably to win market share from Wal-Mart."
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.