Walmart Overvalued by $74, Says DCF Analysis
A recent DCF analysis by GuruFocus suggests that Walmart Inc (WMT) is significantly overvalued. The earnings-based intrinsic value of $33.28 and FCF-based intrinsic value of $18.09 indicate a substantial gap between the current price of $107.98 and the estimated worth.
The two-stage DCF model used in the analysis assumes an EPS growth rate of 6.4% for the next 10 years, followed by a terminal growth rate of 4%. The results show that Walmart is overvalued according to both the DCF and GF Value™ models.
The GuruFocus Score (GF) of 84/100 indicates strong overall performance, but the low predictability rank of 1/5 stars suggests that the DCF model's reliability may be compromised. The analysis also highlights a significant divergence in ownership signals among gurus, with 6 adding to their positions and 13 trimming theirs over recent quarters.