Walmart vs. Visa: With Return Forecast Of 25%, Visa Is A Better Bet

Last Updated: 1/10/2024

We Forecast Higher Stock Return For Visa vs. Walmart

Walmart is trading at a cheaper P/S valuation vs. Visa but it makes sense to pay more for Visa for a higher return

WMT and V have similar operating income

3-Year Return Depends On [1] Revenue Growth [2] P/S

[1] How Much Can Revenue Grow In Next 3 Years

We forecast annual revenue growth of 2.3% for WMT and 8.7% for V

Walmart Revenue vs. Visa Revenue

[2] Which P/S Scenarios Make Sense

We forecast P/S of 0.7 for WMT and 15.3 for V based on below plausible scenarios

Walmart P/S vs. Visa P/S

Are Current P/S Ratios Justified

A higher P/S is justified by higher margin, higher revenue growth, better margin expansion, and lower risk

P/S Ratio

Revenue Growth & Operating Margin

Financial & Market Risk

Note On P/S Justification

Past Market Return Comparison vs. Benchmarks

Since 2019, Walmart and Visa returned 68% and 97% respectively vs. 87% for S&P 500 and 416% for Trefis Multi-Strategy Portfolio

 

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