Question
Answer the following questions: Three part question Is Walmart stock overvalued or undervalued when compared to...
Answer the following questions: Three part question
Is Walmart stock overvalued or undervalued when compared to the current stock price?
What are the analysts’ recommendations for this stock (buy, sell, or hold)?
Do you agree with them? Would you consider purchasing this stock? Why?
Answers
Is Walmart stock overvalued or undervalued when compared to the current stock price?
Source: Walmart Stock price forecast, CNN Money Website, retrieved from https://money.cnn.com/quote/forecast/forecast.html?symb=WMT on 27th January 2019
- Nasdaq website has assembled recommendations from 29 analystes on 12 months price forecast:
- Median target = $105.00,
- High estimate = $120.00 and
- Low estimate = $ 94.00.
- The median estimate is 8% more than current price of $ 96.94.
- Let's look at 52 weeks Hi and Low for Walmart:
- 52 week hi = $109.98
- 52 weeks low = $ 81.78
- Current stock price = $ 96.94
Thus stock appears to be marginally undervalued.
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What are the analysts’ recommendations for this stock (buy, sell, or hold)?
Please see the two pictures below. The source of the same is also mentioned below each picture.
Source: Walmart Stock price forecast, CNN Money Website, retrieved from https://money.cnn.com/quote/forecast/forecast.html?symb=WMT on 27th January 2019
Please see the second picture below:
Source:
Walmart Inc. Analyst Stocks Recommendations, Nasdaq Website, retrieved from https://www.nasdaq.com/symbol/wmt/recommendations on January 29, 2019.
Points to note:
- Number of hold recommendations is the maximum
- Buy / strong buy recommendations are there as well
- However there is no underperform / sell recommendations.
Do you agree with them? Would you consider purchasing this stock? Why?
These are the analysts of national and international repute. I have no specific reason to disagree with them,
I will adopt a wait and watch policy on this stock. There is a limited upside potential in the stock. The stock is marginally undervalued. Hence, i will not buy but track the stock to keep a check on its performance.
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