Walmart Inc. (WMT): A Bull Case Theory

Core Thesis - Walmart Inc. is undergoing a significant transformation from a traditional retailer to a digitally enabled platform, with current valuation multiples reflecting high investor expectations for profit growth and margin expansion [2][5] Valuation Metrics - As of November 26th, Walmart's share price was $109.10, with trailing and forward P/E ratios of 37.41 and 35.21 respectively [1] - The company's P/E ratio is currently 36–37× and EV/EBIT is approximately 27×, which are 35–40% above decade-long averages [2] Strategic Initiatives - Walmart's strategy includes an omnichannel approach utilizing over 4,700 stores as mini-fulfillment centers, enabling same-day delivery and grocery pickup [3] - Higher-margin profit streams such as Walmart Connect advertising, marketplace seller fees, and Walmart+ memberships are expected to contribute over 20% of operating income in the near future [3] - The company aims to reduce costs by 20% through aggressive automation in fulfillment and distribution centers [3] E-commerce Growth - Walmart is the second-largest e-commerce player in the U.S., leveraging its grocery dominance and store-enabled last-mile delivery to enhance customer engagement and digital revenue [4] - International e-commerce expansion, particularly through platforms like Flipkart, is projected to double digital revenue by 2028 [3] Market Expectations - The stock has significant upside potential if execution of strategic initiatives is successful; however, the market is currently pricing in flawless performance [5] - Any delays in automation, marketplace growth, or digital adoption could lead to a notable re-rating of the stock [5]