Wal-Mart is a multinational retail company listed in New York Stock Exchange and headquartered in Arkansas, US.
The year of 2015 roved to be tough for the stocks of Wal-Mart stores Inc. as they finished the year approximately 29% down. The stocks of the company showed the significant fluctuations in 2015 and the prices moved between the ranges of $56.3 - $89.26 (Wal-Mart Stores Inc. (WMT) Historical Prices, 2016). The performance of the company’s stock proved to be the worst in the past ten years and due to the significant decline in the past year, the investors are of the view that stocks of the company are now grossly undervalued.
There had been multiple factors behind the poor performance of the company’s stock in 2015. The primary reasons had been the increasing costs of retail goods and the declining growth in e-commerce business of the company.
Moreover, the company had also announced the closure of 269 stores, more than half of which are situated in Brazilian market that proved to be most challenging for the company. The company’s management had also announced that due to the closure of sores and increase in competition, including the competition from the online markets such as Amazon.com, its earnings for the current fiscal year will decline by approximately 12%. Another reason for the decline in earnings is that the company is investing its equity in online operations and improvement of customer services experience which is expected to recover the loss faced by the company’s stock in 2015 (Annual Report 2014: Wal-Mart, 2014).
The above conclusions were reached after the thorough analysis of the history of the company’s stock prices and retail market situation of the country.
References
Annual Report 2014: Wal-Mart. (2014). Arkansas: Wal-Mart.
Wal-Mart to shutter 269 stores, 154 of them in the U.S. (2016, January 15). Retrieved from http://www.chicagotribune.com/business/ct-walmart-closing-stores-20160115-story.html
