Walmart's financials are quite strong YoY and both indicators are pointing towards the upside. But, the firm is set to report quarterly earnings tomorrow.
Overview
Walmart Inc is an American international retail company that operates a chain of discount department stores, hypermarkets and grocery stores from the United States. The company has more than 5,100 retail units and approximately 550,000 employees around the world. It is headquartered in Bentonville, Arkansas.
Financials
Looking at Walmart’s 2022 financials against 2021, total revenue rose $12,529bn year-on-year with total income rising to $25,942bn from $22,648 after costs and expenses. Dividends declared per share also went up by $0.04 to $2.20. However, total current assets have seen a drop to $81,070bn from $90,067bn in the previous year, and even though total current liabilities and long-term debt also saw a decline, total liabilities and equity came in at $244,860bn for the year 2022. A $7,636bn decrease YoY. Net cash and cash equivalents at the end of the year fell by $2,954bn, but this was as more net cash was used in financing activities. For example, an additional $7,628bn was used for repayments of long-term debt in 2022 compared to 2021, and Walmart purchased more company stock in 2022 ($9,787 in 2022 versus $2,625 in 2021).
Technicals
From a technical overview, Walmart’s shares are currently trading at $142.29 a share. Applying the Fibonacci retracement to the chart, a major resistance level sits at $144.67 (61.8% Fib). A break above this resistance level could see the stock head towards the 76.4% Fib retracement, where the next resistance level rests at $151.14. Towards the downside, support sits at $139.44 (50% Fib) then at $134.72 (38.2% Fib), then a major support level at $127.74 (23.6% Fib). A break below the 23.6% Fib may see the share price slide back towards the lows of the year. Looking at the indicators, MACD is currently positive and so is RSI as it reads 57.
Summary
Overall, the financials of the company seem quite strong year-on-year. Both total revenue and net income show regular growth, as well as higher dividends for investors to benefit from. Total liabilities and equity fell $7.636bn but the company has lowered its long-term debts and current liabilities YoY. Additionally, Walmart has used a big chunk of its net cash to purchase company stock and clear debt, while continuing to expand its operations and remain in a similar profitable position as in the previous financial year. Based on the technicals, both indicators are positive suggesting a bullish approach. However, Walmart is set to report its quarterly earnings on 15th November. Expected to report an EPS of $1.32 on revenue of $147.55bn. It is also important to note that with the current cost-of-living crisis consumers are spending less, and may continue to spend less over the next 12 months. Which is very much dependent on the economies around the world and inflation.
