Walmart Stock Has Lots of Room to Rise on International Growth

WalmartWalmart's (WMT) international operations segment continues to be the key growth driver for the company as its U.S. division has posted declining comparable-store sales for the eighth consecutive quarter. Wal-Mart competes with other big retailers like Target (TGT), Costco (COST), Amazon (AMZN) and Best Buy (BBY).

Our price estimate for Walmart is near $73, implying an approximately 37% upside to the market price.

International Expansion is Key for Growth

With the company recording sluggish results in developed markets, the developing world has become the growth driver for Walmart. This segment consists of retail operations in 14 countries generating 26.1% of net sales in 2011. Walmart's international segment has witnessed a substantial increase in its store count from 2,733 in 2007 to 4,557 in 2011 -- an addition of roughly 360 stores a year.


Geographically diversified operations also ensure a stable revenue stream for the company, as they tend to provide diversification benefits in terms of inflation or rising commodity costs in a particular region. The growing middle class in emerging economies such as India and China could provide substantial growth opportunities. Walmart could employ its well-known cost saving and technologically tested logistics systems in these nations.

Walmart has begun a series of acquisitions in order to build its presence in these countries. It recently entered into a minority stake of Yihaodian, a popular online retailer in China. The acquisition is aimed at further strengthening its presence in the region. In the African subcontinent, Walmart acquired a 51% stake in Massmart, a leading African retailer that runs nine wholesale and retail chains with approximately 288 stores in 14 countries in Africa.

See our complete analysis for Walmart stock here

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9 Comments

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thomasva6

we need walmarts in china that sell only USA products.

July 19 2011 at 1:13 PM Report abuse rate up rate down Reply
donut999

I just wish their stock was worth buying. Same humdrum range for about 10 years now.

July 19 2011 at 10:46 AM Report abuse rate up rate down Reply
donut999

Everyone should be grateful Wal Mart is out there rather than bashing them. Of course, you do not have to shop there, but just remember when you are at Target or you other favorite similiar store, much of the reason you are there is because Wal Mart's existence and merchandising techniques have forced all competetiors to get with the program. And where do you think those other stores get the merchandise that Wal Mart forces them to be competetive pricewise? The same places Wal Mart gets their merchandise.

July 19 2011 at 10:44 AM Report abuse rate up rate down Reply
alfredschrader

Wal Mart's business model is selling cheap goods to once afluent but now pitiful poor and unemployed customers.
This business model wont work anywhere else, the rest of the world is a success with actual leadership....Al-

July 18 2011 at 4:30 PM Report abuse rate up rate down Reply
toosmart4u

Lets all pitch in and save these United States. Lets all buy American. Put everyone back to work. Remember, when you vote republican you are voting to end social security and medicare.

July 18 2011 at 4:10 PM Report abuse rate up rate down Reply
pusinskyjimmyp

ITS A MONEY TREE.ALL THOSE LIMBS.IF ANYONE HAS GONE TO THIER STORES,AND SEEN HOW MUCH THIER PRICES HAVE GONE UP,UP,UP.THEY USED TO BE LOW COST TO BUY FOOD,NOT ANYMORE.THIER MOTTO,PUT ALL OTHER STORES OUT OF BUSINESS,THEN HIKE UP THE GOODS.IF WE ARE THE ONLY STORE LEFT,WE WILL SCREW EVERYONE,AND MAKE ALOT OF MONEY FOR THE STOCK HOLDERS.THIS IS HOW I LOOK AT THEM,I COULD BE WRONG.PROVE ME WRONG.THANK YOU FOR LETTING US SCREW YOU AT WAL-MART!

July 18 2011 at 12:51 PM Report abuse +1 rate up rate down Reply
1 reply to pusinskyjimmyp's comment
gblank1603

If you'd do some research and stop repeating everything you hear on the internet you'd see just how wrong you are

July 18 2011 at 2:13 PM Report abuse rate up rate down Reply
1 reply to gblank1603's comment
esword2020

i just purchased a cooling pad for lap top .it was 26 dollars at wal mart and 16 at target,i bought at target same unit

July 18 2011 at 3:19 PM Report abuse rate up rate down
ldblkwrs

OMG 73 is kinda pushing it dont ya think it not been able to get past 57 and stay there for any period of time

July 18 2011 at 12:17 PM Report abuse +1 rate up rate down Reply