DCF Studio

    WMT · NMS · Consumer Defensive

    Walmart Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 44.21

    Market price

    USD 127.69

    Implied upside

    -65.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-01-31

    AdjustedCapital expenditure runs at 3.3% of revenue against depreciation of 1.9%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Current EV/EBITDA of 24.4x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 44.21-65.4%
    Exit multiple
    USD 84.33-34.0%
    Market price
    USD 127.69

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn14bn27bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 752.9bnUSD 785.6bnUSD 817.9bnUSD 849.7bnUSD 880.7bnUSD 910.8bnUSD 939.9bnUSD 967.7bnUSD 994.2bnUSD 1019.0bn+3.4%
    EBITUSD 30.1bnUSD 31.4bnUSD 32.7bnUSD 34.0bnUSD 35.2bnUSD 36.4bnUSD 37.6bnUSD 38.7bnUSD 39.8bnUSD 40.8bn+3.4%
    NOPATUSD 23.8bnUSD 24.8bnUSD 25.8bnUSD 26.9bnUSD 27.8bnUSD 28.8bnUSD 29.7bnUSD 30.6bnUSD 31.4bnUSD 32.2bn+3.4%
    Add depreciation & amortisationUSD 14.1bnUSD 14.8bnUSD 15.4bnUSD 16.0bnUSD 16.5bnUSD 17.1bnUSD 17.7bnUSD 18.2bnUSD 18.7bnUSD 19.1bn+3.4%
    Less capital expenditureUSD -24.8bnUSD -25.0bnUSD -25.2bnUSD -25.3bnUSD -25.3bnUSD -25.2bnUSD -25.0bnUSD -24.8bnUSD -24.4bnUSD -24.0bn-0.4%
    Capex, % of revenue3.3%3.2%3.1%3.0%2.9%2.8%2.7%2.6%2.5%2.4%-
    Less increase in working capitalUSD -436.3mUSD -359.5mUSD -355.2mUSD -349.1mUSD -341.1mUSD -331.3mUSD -319.5mUSD -305.9mUSD -290.4mUSD -273.2m-5.1%
    Free cashflow to firmUSD 12.7bnUSD 14.2bnUSD 15.7bnUSD 17.2bnUSD 18.7bnUSD 20.3bnUSD 22.0bnUSD 23.7bnUSD 25.4bnUSD 27.1bn+8.8%
    Discount factor0.96420.89650.83350.77490.72050.66980.62280.57900.53830.5005-
    Present valueUSD 12.3bnUSD 12.7bnUSD 13.0bnUSD 13.3bnUSD 13.5bnUSD 13.6bnUSD 13.7bnUSD 13.7bnUSD 13.7bnUSD 13.6bn-
    Present Value Of The ForecastUSD 133.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.682Reported 0.526, pulled toward 1.0 (Blume)
    Cost of equity7.78%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 10.7x interest cover. Book interest / average debt was lower, at 4.4%.
    Market capitalisationUSD 1016.2bn93.8% of capital
    Total debtUSD 67.1bn6.2% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.56%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 44.21

    68% of EV

    Forecast FCFF, final year
    USD 27.1bn
    Capex at depreciation, working capital in reinvestment
    USD 32.2bn
    Less reinvestment at g/ROIC (14.9% of NOPAT)
    USD -4.8bn
    Capitalised
    USD 27.4bn
    ROIC (reported)
    16.7%
    Terminal value, undiscounted
    USD 555.2bn
    Terminal value, discounted
    USD 277.9bn
    Enterprise value
    USD 411.0bn
    Less net debt
    USD 56.4bn
    Equity value
    USD 354.6bn

    Exit at 20.0x EBITDA

    Value per shareUSD 84.33

    82% of EV

    Terminal value, undiscounted
    USD 1198.2bn
    Terminal value, discounted
    USD 599.7bn
    Enterprise value
    USD 732.8bn
    Less net debt
    USD 56.4bn
    Equity value
    USD 676.5bn

    Spread between methods: 62%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.56%66.7172.2679.7390.25106.02
    6.56%51.2254.0157.5662.2068.44
    7.56%40.9042.3844.2146.5049.42
    8.56%33.5434.3335.3036.4837.96
    9.56%28.0528.4528.9429.5530.30

    Outlined: this model. Green text: above today's price of 127.69. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year5.3%3.6%15.1%
    EBIT margin4.3%4.0%9.8%
    Discount rate-7.6%4.5%
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    Yahoo Finance and RBA data. General information, not advice. Methodology.