Walmart Earnings: Solid Sales as Chain Benefits from Consumers’ Focus on Value; Shares Trade Fairly

Our $148 per share valuation of wide-moat Walmart should not change significantly after the company announced a solid start to fiscal 2024 (first quarter ended April 30). With the namesake domestic stores, international locations, and Sam's Club all benefiting from consumers' focus on value and redirection of spending toward consumables and everyday essentials, we believe Walmart is well-positioned for the turbulent economic environment. We still expect low-single-digit annual top-line growth rates and mid-single-digit operating margins over the long term. With the shares trading near our valuation, we suggest investors await a greater margin of safety.