Market Analysis by covering: S&P 500, Walmart Inc. Read 's Market Analysis on Investing.com
Stock market today: S&P 500 rides Alphabet surge to end higher as AI rally resumeslast Thursday morning, November 20th, ’25, and the stock bounced sharply during the day’s trading, up 6.46%, despite the overall difficult tape from the Nvidia and healthy quarterly comps.
Most importantly, adjusted operating income rose 8% y-o-y, while delivery centers are only halfway through their supply chain automation initiative, with the goal of having all the fulfillment centers 100% automated in the next few years. The comment on the conference call quoted directly, “Roughly 50%, in fact more than 50% of our volume from fulfillment centers is coming from automation. And that translates into lower shipping costs. Our shipping costs have been down for many quarters in the 30% range.” Management really went out of their way to talk about e-commerce growth both in the US and internationally. E-commerce has just become profitable for Walmart in the last few quarters, and – from parsing the conference call notes – may be more profitable internationally than it is in the US, at least for now. Low to mid 20% ecommerce growth is a plus for Walmart although they haven’t really broken out the numbers for the sell-side analysts yet. The same with advertising and Walmart Connect too.The big pushback by investors these days comes from Walmart’s PE multiple at 39x expected fiscal ’26 of $2.63, with just 5% growth expected this year, but fiscal ’27 and ’28 EPS growth is expected to return to 13% and 11%, since Walmart will see more operating margin expansion over the next two years, thanks to supply-chain costs coming down and advertising growth and Walmart Connect adding to margins, not to mention some slight easing in tariffs as tariffs lap the 2025 compares. Global advertising grew 53% in fiscal Q3, but little else was said about advertising in the conference call. Walmart Connect is growing at 20%, although Morningstar assumes that Connect will grow at just 10% annually, and given the rich margins, it will account for 10% of Walmart’s operating margin after 10 years. Connect is growing at more than twice that 10% currently and is a relatively new revenue stream for Walmart. Morningstar may be a tad too conservative on Connect’s longer-term growth rate, but that’s ok, Morningstar usually is.but the retail giant continues to innovate and is constantly making “cost” a focus so they can keep their promise of “every day low price”. Trailing-twelve-month revenue for Walmart as of this latest quarter of results is $703 billion for the giant, and once above $700 billion, it’s unlikely to return below that number. I don’t know of another S&P 500 company that has printed $700 billion in annual revenue with the possible exception of Exxon Mobil was duly noted.) has stolen market share gradually from Walmart for years, likely beginning in the early part of the last decade when apparel started to be sold online, while Walmart fiddled with “ecommerce” delivery options that took years to work out. A guy by the name of Jason DelRay, wrote a book called “Winner Sells All” a few years ago, which detailed the e-commerce struggles of Walmart in the home delivery arena, and Walmart’s issue with how to move the Walmart business model closer to Amazon, while Amazon was gobbling up share in the general merchandise segment from Walmart. Today, Amazon is trying the brick-and-mortar approach with Amazon Fresh, and Whole Foods, but it’s a struggle, as Amazon tries to grab share in grocery, which is a dominant strength of Walmart. The two giants, each headed for $700 billion plus in revenue, are trying to encroach on each other’s business models. Personally, I think Walmart is closer to grabbing more share from Amazon in e-commerce, than Amazon is from grabbing share from Walmart in grocery. Both are phenomenal companies, and both are locked in a dog fight as the rest of retail pays the price. Total retail sales in the US in 2024 were $7.4 trillion per the Census Bureau , while ex gas stations and auto dealers, etc., that number is $5.25 trillion, which would make Walmart’s $700 billion roughly 13% of the $5.25 trillion and 10% of the $7.4 trillion. Nothing has changed with our Walmart position in calendar 2025. In aggregate, the Walmart position represents a 1.3% weight in client accounts.None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results. Readers should gauge their own comfort with portfolio volatility and adjust accordingly. The above information may or may not be updated, and if updated may not be done in a timely fashion.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. 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