Should Walmart Inc. (WMT) be Part of a Diversified Investment?

Analysts at Daiwa Securities cut their rating on shares of Walmart Inc. (NYSE:WMT) from Outperform to Neutral in their opinion released on November 20. Analysts at Telsey Advisory Group are sticking to their Outperform recommendation. However, on August 17, they lifted target price for these shares to $107 from $105. Analysts at Telsey Advisory Group, made their first call for the stock with a Outperform rating, according to a research note that dated back to August 17.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Walmart Inc. (NYSE:WMT)’s prospects. The earliest insider trade took place on 12/04/2018. Walton S Robson parted with a total of 1.11 million shares of company at average share price of $97.92. The total for the sales was set at $108.61 million. After this transaction, the Director, 10% Owner account balance stood at 1460 million shares. The stock lost -3.22 percent since that insider sale. On 12/04/2018, Walton Jim C, 10% Owner, sold 1.11 million shares at a price per share of $97.92. This removed 108.61 million shares from the insider’s fortune and the stock saw a -3.22 percent retreat in value since the news became public. This transaction left 1470 million shares in the 10% Owner account. On 12/04/2018, 10% Owner Walton Alice L performed a sale transaction worth $108.61 million. This sale at $97.92 each has eliminated 1.11 million shares from the insider’s portfolio position. Meanwhile, shares have recorded -3.22 percent decrease since the transaction was reported. The insider now is left with 1470 million shares remaining in the account. Furner John R., who performs the Executive Vice President job, sold 4 thousand shares for $389.36 thousand. The disposal occurred on 11/28/2018 was priced at $97.34 per share. The share price plunged -2.64 percent since the reporting date. Furner John R. now left with a stake of 163.09 thousand WMT stock worth $15.46 million after the insider selling.

Walmart Inc. (WMT) is expected to jump by 12.9 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $120-month high price target. This represents a whopping 26.62 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $105, which represents a return potential of 10.79 percent when compared to the closing price of the stock of $94.77 on Thursday, December 06. The lowest price target for the stock is $95 — slightly more than 0.24 percent from WMT’s current share price.

The shares are currently floating around the first support level of $93.44. Below this, the next support is placed in the zone of $92.12. Till the time, the WMT stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 40.47 on daily chart, which may remain a cause for concern. If the price breaks below $92.12 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $95.75 mark may result into a pull-back move towards $96.74 level.

WMT shares dropped -1.04 points or -1.09 percent on Thursday to $94.77 with a heavy trade volume of 10.313 million shares. After opening the session at $94.94, the shares went as high as $95.41 and as low as $93.1, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $277 billion and now has 2.92 billion shares outstanding. Walmart Inc. (WMT) stock has lost -7.91 percent of market value in 21 trading days.

WMT stock has a trailing 3-year beta of 0.33, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.67 a share in the trailing twelve months. The stock’s value has fallen -4.03 percent year to date (YTD) against a decline of -3.13 percent in 12 month’s time. The company’s shares still trade -13.83 percent away from its 1-year high of $109.98 and 15.88 percent up from 52-week low of $81.78. The average consensus rating on the company is 2.3, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Walmart Inc. (WMT) are trading at a P/E ratio of 19.01 times earnings reported for the past 12 months. The industry WMT operates in has an average P/E of 38.01. Its P/E ratio went as low as 13.99X and as high as 17.14 over the 5-year span. Further, it is sporting a 0.54 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.1. 25.2 percent is the gross profit margin for Walmart Inc. and operating margin sits at 3.4 percent. Along with this, the net profit margin is 1.7 percent.

WMT will be showing off its Q4 earnings on February 19. Analysts are forecasting revenue to climb 1.8 percent to $139B in the next fiscal quarter, while earnings are seen soaring by nearly 0 percent to $1.33 per share. History has shown that shares in Walmart Inc. have gone down on 19 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.08 per share, better than the $1.01, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $125B, worse than the $126B analysts expected. Earnings are estimated to increase by -26.8 percent this year, -2.58 percent next year and continue to increase by 4.17 percent annually for the next 5 years.