Walmart (WMT) is currently trading at a forward PE multiple of 17.4x, which is higher than Target’s (TGT) current PE multiple of 14.3x. Walmart’s valuation multiple is also higher than the S& 500 Index (SPY), which was trading at a forward PE multiple of 16.7x as of July 5. Walmart stock is trading 5% higher than its four-year historical average multiple of 16.6x.
Analysts expect Walmart’s top line to see a 2% growth in fiscal 2018, while its EPS is projected to grow a little more than 9%. Walmart stock offers a dividend yield of 2.5%. In comparison, Target’s lower valuation and higher dividend yield (3.5%) and Costco’s (COST) impressive sales and earnings growth rate makes them more attractive investment options in the retail space.
Ratings and target price
Of the 31 analysts covering Walmart stock, 18 of them are recommending a “hold,” and 13 are recommending a “buy.” They have given the stock a target price of $95.12, which reflects an upside of 12.5% based on its closing price of $84.57 as of July 5.
Most of the analysts covering Target are recommending a “hold” for the stock. But analysts remain optimistic about the prospects for Costco and have rated it a “buy.”