Walmart Valuation - Deep Research Plan
This document outlines the key research questions needed to build a comprehensive Investment Memorandum and Valuation for Walmart Inc. (WMT).
Objective: Fill the “Sources Consulted” and “Conclusions” columns with high-quality, verified information. This will serve as the theoretical foundation for the MoI and financial models.
Research Table
| Category | Research Question | Sources Consulted | Conclusions (Mini-Essay) |
|---|---|---|---|
| 1. Macro & Industry | What are the current consensus forecasts for US Consumer Spending, Inflation (CPI), and Retail Sales for 2026-2030? How does this impact discount retailers vs. premium? | ||
| 1. Macro & Industry | How is the “Omnichannel” retail landscape evolving? What is the current market share split between pure-play eCommerce (Amazon) and Brick-and-Mortar + Digital (Walmart, Target)? | ||
| 2. Competitive Edge | Logistics War: Compare Walmart’s distribution network efficiency (fulfillment centers, automation) vs. Amazon’s. Is Walmart’s “store-as-fulfillment-center” model proving more cost-effective for last-mile delivery? | ||
| 2. Competitive Edge | Membership: How does Walmart+ churn and growth compare to Amazon Prime? What is the perceived value proposition gap? | ||
| 3. Segments: US | What is the impact of grocery inflation normalization on Walmart’s “Rollbacks” strategy and margins? Are high-income consumers retaining their shift to Walmart? | ||
| 3. Segments: Int’l | India (Flipkart/PhonePe): What is the path to IPO for Flipkart and PhonePe? What are the latest valuation marks? How is the competitive dynamic vs. Amazon India and Reliance Retail? | ||
| 3. Segments: Int’l | Mexico (Walmex): What are the growth drivers for Walmex? How is the “Bodega Aurrera” format performing against hard discounters? | ||
| 3. Segments: Sam’s Club | How does Sam’s Club’s operating margin and sales-per-square-foot compare to Costco? Is the gap closing? | ||
| 4. New Revenue Streams | Walmart Connect (Ads): What is the growth rate of Walmart’s advertising business? How does its ROAS compare to Amazon Ads? What is the projected margin contribution? | ||
| 4. New Revenue Streams | Data Ventures/Luminate: How is Walmart monetizing its shopper data? Is this a material revenue stream yet? | ||
| 5. Financials | ROIC Analysis: Has Walmart’s extensive capex in automation and supply chain over the last 5 years started to accrete to ROIC? Or is it still dragging it down? | ||
| 5. Financials | Margins: Can Walmart sustainably expand EBIT margins above 5-6% given the mix shift to eCommerce (lower margin) balanced by Ads (higher margin)? | ||
| 6. Valuation Inputs | What is the appropriate Beta for Walmart in the current rate environment? Should we use a bottom-up beta from retail peers or the regression beta? | ||
| 6. Valuation Inputs | SOTP Multiples: What are the trading multiples (EV/Sales, EV/EBITDA) for pure-play ad tech companies (Trade Desk, etc.) and Indian tech conglomerates to benchmark Walmart Connect and Flipkart? | ||
| 7. Risks | Antitrust: Are there any looming FTC investigations specifically targeting Walmart’s buyer power or pricing strategies? | ||
| 7. Risks | Labor: What is the risk of unionization in Walmart’s supply chain or stores? How do their wages compare to Target/Costco/Amazon? | ||
| 8. ESG | Project Gigaton: Is Walmart on track? How does their supply chain emission reduction impact supplier costs and relationships? |