The calculations below outline how an intrinsic value for Wal-Mart Stores is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$15,356.65||$13,029.29||$14,310.58||$14,852.50||$16,245.00|
|Source||Analyst x11||Analyst x12||Analyst x11||Analyst x2||Analyst x1|
Discounted (@ 8.5%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $16,245 × (1 + 2.5%) ÷ (8.49% – 2.5%)
Terminal value based on the Perpetuity Method where growth (g) = 2.5%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($241,780 / 3,038)
Value per share:
Current discount (share price of $74.78): 6%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.49% = 2.47% + (0.8 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.763 = 0.667 (1 + (1- 30%) (20.5%))
Levered Beta used in calculation = 0.8
Are Wal-Mart Stores's annual earnings growth expected to exceed 3.6% over the next 3 years?
Purchase Wal-Mart Stores on or before the 'Buy Limit' to receive their next dividend payment.
Mr. C. Douglas McMillon, also known as Doug, has been the Chief Executive Officer and President of Wal-Mart Stores, Inc since February 1,2014. Mr. McMillon served as the President and Chief Executive Officer of Wal-Mart International Operations at Wal-Mart Stores from February 1, 2009 to January 2014. He served as an Executive Vice President of Wal-Mart Stores Inc. since August 4, 2005. He served as the Chief Executive Officer of Sam's Club Discount Warehouse Stores Operations from August 4, 2005 to February 1, 2009. He served as the Chief Executive Officer and President of SAM'S West, Inc., (alternate name Sam's Club) from August 4, 2005 to January 2009. He was responsible for the overall corporate strategy and direction of Sam's Club. Mr. McMillon served as an Executive Vice President of Merchandising and Replenishment of Sam's Club of Wal Mart Stores Inc. until August 2005. He worked two consecutive summers as an Associate at the Wal-Mart Distribution Centers in Northwest Arkansas. He served as a Buyer Trainee for Wal-Mart working in Store #894 in Tulsa, OK. Mr. McMillon served as a Buyer for Food and Candy, Ladieswear and Crafts, a Divisional Merchandise Manager for Home Furnishings and Infants and Toddlers, Vice President and General Merchandise Manager at Sam’s Club International and Senior Vice President and General Merchandise Manager at Wal-Mart Stores Inc., where he oversaw purchases for Toys, Electronics, Video Games, Photo, Sporting Goods, Stationary and Office Supplies. He serves as a Director of National Chapter of Students in Free Enterprise (SIFE). He has been a Director of Wal-Mart Stores Inc. since November 25, 2013. He serves as of Director of US-China Business Council, Inc. He serves on the Executive Board of Directors of Center of Retailing Excellence at the University of Arkansas and on the Corporate Board of Advisors for National Council at La Raza. He has been a Director of Wal-Mart Stores Inc. since November 25, 2013. He served as Director of Massmart Holdings Limited from June 20, 2011 to August 20, 2012. He served as a Director of Wal-Mart de Mexico SAB De CV since 2009. He has been recognized as a Young Global Leader by the World Economic Forum. Mr. McMillon graduated from the University of Arkansas in Fayetteville, with a Bachelor of Science in Business Administration (BSBA) in Accounting. Mr. McMillon received an M.B.A. in Finance from the University of Tulsa.wal
Average tenure of the Wal-Mart Stores management team:
Wal-Mart Stores, Inc. operates retail stores in various formats worldwide. It operates through three segments: Walmart U.S., Walmart International, and Sam’s Club. The company operates discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, cash and carry stores, home improvement stores, specialty electronics stores, apparel stores, drug stores, convenience stores, and membership-only warehouse clubs; and retail Websites, such as walmart.com and samsclub.com, as well as mobile commerce applications. It offers grocery products, including meat, produce, natural and organics, deli and bakery, dairy, frozen foods, alcoholic and nonalcoholic beverages, floral and dry grocery, as well as consumables, such as health and beauty aids, baby products, household chemicals, paper goods, and pet supplies; and health and wellness products, which include pharmacy, optical services, clinical services, over-the-counter drugs, and other medical products. The company also provides electronics, cameras and supplies, photo processing services, cellular phones, cellular service plan contracts and prepaid service, movies, music, video games, and books; stationery, automotive, hardware and paint, sporting goods, and outdoor living and horticulture, as well as fabrics, crafts, and seasonal merchandise; apparel for women, girls, men, boys, and infants, as well as shoes, jewelry, and accessories; and home furnishings, housewares and small appliances, bedding, home decor, and toys. In addition, it offers fuel and financial services and related products, including money orders, prepaid cards, wire transfers, money transfers, check cashing, and bill payment. In addition, it offers brand name merchandise, including hardgoods, softgoods, and selected private-label items, such as Member’s Mark. It operates 11,695 stores under 59 banners in 28 countries and e-commerce Websites in 11 countries. Wal-Mart Stores, Inc. was founded in 1945 and is headquartered in Bentonville, Arkansas.
|Name:||Wal-Mart Stores, Inc.|
|Market Cap:||$227,185 million|
702 SW 8th Street, Bentonville, 72716, United States
|Industry:||Hypermarkets and Super Centers|
|Sector:||Food and Staples Retailing|