Will Business Model of Sam’s Club Push Walmart’s Stock Price?

In American retail, few names stand out as prominently as Sam’s Club. A subsidiary of Walmart, Sam’s Club has made its dominance in retail history, not just as a wholesale club but as a significant player in the gasoline market. For many Americans, the brand represents more than just a place to buy in bulk; it’s a symbol of affordable quality, showcasing the power of consumer choice with economic accessibility. The story of Sam’s Club is intertwined with the narrative of American consumerism. Its inception in the early 1980s was a response to a growing demand for a new kind of shopping experience, one that combined the convenience of bulk purchasing with the promise of lower prices. Over the decades, as the brand expanded its footprint, it ventured into various sectors, with gasoline being one of its most strategic moves. But what many might not realize is the crucial role Sam’s Club plays in boosting Walmart’s stock price, particularly through its competitive gas pricing strategy. The decision to enter the gasoline market wasn’t just about offering members another product; it was a strategic move to increase foot traffic, enhance brand loyalty, and create a new revenue stream. This strategy has not only benefited consumers but has also had effects on the stock market, influencing investor perceptions and valuations. In this article, we’ll explore Sam’s gas price, its market performance, Walmart stock price prediction and comparison with Costco gas price to get a better view of the company.  

Sam’s Club: A Quick Introduction 

Founded in 1983 in Midwest City, Oklahoma, Sam’s Club was envisioned as a warehouse club where businesses could purchase products in bulk at discounted prices. Named after Walmart’s founder, Sam Walton, the club quickly expanded its reach, serving not just businesses but also individual consumers.

As of 2023, it’s the second-largest warehouse club in sales, trailing behind Costco. By October 2022, Sam’s Club had 600 locations across 44 U.S. states and Puerto Rico, excluding a few states due to past closures. The chain also offers car wash services at 41 of its gas stations. Internationally, there are Sam’s Club branches in Mexico, China, and Brazil, with the average store size being around 134,000 sq ft. The company had a presence in Canada from 2003 to 2009. In 2018, Sam’s Club closed several stores unexpectedly, with 63 locations liquidating. This move, along with plans to transform some stores into e-commerce centers, reflects Walmart’s focus on enhancing its online retail presence to compete with Amazon.

Sam’s Club: History And Expansion 

Sam’s Club expanded through acquisitions, such as the purchase of SuperSaver Wholesale Warehouse Club in 1987. By 1989, it had entered the Northeast U.S. market, and in 1993, Walmart acquired PACE Membership Warehouse, converting many into Sam’s Clubs. 

Sam’s Club ventured into Canada in 2003 but exited in 2009, shifting focus to supercentres. In 2010, around 11,200 employees were laid off due to outsourcing and restructuring. Rosalind Brewer became CEO in 2012, followed by John Furner in 2017 and Kathryn McLay in 2019. 

In 2016, a mobile app for scan-and-pay was introduced. In 2018, 63 locations closed, with some becoming e-commerce centers. In 2021, the club faced a boycott in China over product sourcing, and in 2020, a Texas store was the site of a stabbing targeting an Asian family linked to COVID-19 prejudice.

Sam’s Club, akin to other warehouse clubs, offers merchandise in bulk, typically displayed on pallets in a warehouse-style setting. Their range includes jewelry, electronics, apparel, food, and more, with specialized departments like Pharmacy, Tire and Battery, Bakery, and Optical. They promote products under private labels such as Simply Right, Member’s Mark, and Bakers & Chefs, among others. Unlike Walmart, they don’t carry the Sam’s Choice or Great Value brands. In 2008, Sam’s Club launched its first Business Center in Houston, Texas, mirroring the concept of Costco’s Business Centers. However, in 2010, Sam’s Club announced the closure of this Business Center and nine other U.S. locations.

Can You Buy Sam’s Club Stocks?

Sam’s Club isn’t independently traded on stock exchanges like NYSE or NASDAQ. Instead, it operates as a subsidiary of Walmart, a publicly traded company whose stock you can purchase. Sam’s Club offers a warehouse shopping experience similar to Costco, where customers can buy items in bulk at reduced prices compared to regular retail.

To shop at Sam’s Club, an annual membership is necessary. It ranks as the second-largest warehouse club in the U.S., trailing only Costco. While you can’t invest directly in Sam’s Club, buying Walmart stock is an indirect way to invest, given that Walmart oversees Sam’s Club operations.

Hence, we’ll provide an in-depth analysis of Walmart stock’s price, price history and future price prediction.

Walmart Stock: Price History 

Founded by Sam Walton in 1962, Walmart’s ethos was simple: offer consumers lower prices and great service. By 1983, the company went public, and its shares were traded at $1.2 each. Those who recognized the potential and invested early were set for a rewarding journey.

The 1980s marked a period of aggressive expansion for Walmart. The company introduced its first Sam’s Club, ventured into the supermarket domain with Walmart Supercenter, and expanded beyond the U.S. borders. This growth was mirrored in its stock price, which saw a consistent upward trajectory.

The 90s were transformative. Walmart introduced technology, optimizing its supply chain and inventory management. This decade also saw the company’s stock split multiple times, making it more accessible to average investors. Walmart’s stock price began to witness upward volatility as it started climbing from $5 in early 1990. The price continued its buying momentum till 1992 as it faced a decline as investors sold their positions to book profit. After reaching the low of $10 by 1997, WMT’s share price triggered another surge and made a high of $68 in early 2000. However, for the decade, WMT price didn’t show much volatility as it remained below $60 by the end of 2011. 

Entering the new millennium, Walmart focused on global markets, establishing a presence in countries like China and India. Challenges, like competition and controversies, did impact the stock’s performance, but Walmart’s adaptability ensured consistent growth. In 2012, WMT stock price again started rising and reached a high of $87 in 2015. However, by 2015’s end, it dipped to a low of $56, showing a massive shift in investor sentiment. 

Recognizing the e-commerce wave, Walmart acquired Jet.com in 2016, signaling its intent to compete with giants like Amazon. This strategic move, coupled with investments in technology and infrastructure, rejuvenated the stock, attracting a new generation of investors. Following this, WMT prices made a skyrocketing surge and reached a high of $156 in 2022. However, it then met a selling pressure and dropped below $120. 

Today, Walmart’s stock is a staple in many investment portfolios, reflecting the company’s stability, growth potential, and recovery potential. The stock’s price recovered from its 2022 lows and made a high above $160 in 2023. 

Walmart Share Price Prediction: Technical Analysis

Recently, the Walmart share price experienced a minor bearish trend, which has brought more sellers near the immediate resistance levels. However, the price has been on a steady upward trajectory over the last few weeks. After breaking above the $148-mark, Walmart shares sparked an intense buying momentum and surged exponentially. The stock market was previously heavily influenced by rising inflation and the COVID-19 pandemic; however, Walmart showed a strong recovery, as seen on the daily price chart, and maintained its price momentum. Despite facing intense bearish pressure in the past, Walmart’s share has managed to hold an uptrend and is now well above the bearish territory. A thorough technical analysis of WMT’s share price reveals bullish indicators, which may soon send the price to new resistance levels. 

According to TradingView, the Walmart share price is currently trading at $161, reflecting a decrease of 0.48% in the last 24 hours. Our technical evaluation of Walmart’s price indicates that the current bullish momentum may soon fade as bears are attempting to reverse the trend from the upcoming resistance at $166; however, bulls are trying to prevent the price from dropping below the immediate support of $159. Examining the daily price chart, Walmart’s share price has found support near the $135 level, from which the price gained bullish momentum and broke above multiple Fib channels. As Walmart’s price failed to trade above the EMA20, bears are gaining confidence to open short positions and send the stock price to test its upcoming support level. The Balance of Power (BoP) indicator is currently trading in a negative region zone at 0.14 as sellers are increasing their domination on the price chart.

To thoroughly analyze the price of Walmart shares, it is crucial to take a look at the RSI-14 indicator. The RSI indicator recently experienced a surge as WMT price is attempting to hold buyers’ demand. The trend line is currently hovering below the midline as it trades at level 45, hinting that an upward correction is on the horizon. It is anticipated that Walmart’s share will soon attempt to break above its 23.6% Fibonacci level to achieve its short-term bullish goals of around $165. If bears fail to plunge below the current 0.038 Fibonacci region, a skyrocketing trend might be on the horizon. 

As the SMA-14 continues its swing by trading at 43, it trades slightly below the RSI line, potentially holding concerns about the stock’s downward movement on the price chart. If WMT’s shares make a bullish reversal, it can pave the way to resistance at $175. A breakout above will drive the share price toward the upper limit of the Bollinger band at $190.

Conversely, if Walmart fails to hold above the critical support level of EMA100, a sudden collapse may occur, resulting in further price declines and causing the WMT shares to trade near the Bollinger Band’s lower limit of $135. If the price fails to continue a trade above, it may trigger a more significant bearish downtrend to $118.

Walmart Share Price Prediction By Blockchain Reporter 

Walmart Share Price Prediction 2023

In 2023, Walmart’s share price is projected to maintain an average of around $135. The minimum price is expected to hover around $118, while the maximum could reach up to $200. These estimates are based on Walmart’s consistent growth trajectory, its expansion into new markets, and the success of its various in-house brands and e-commerce platforms.

Walmart Share Price Prediction 2024

Moving into 2024, Walmart’s share price is anticipated to experience a positive shift, averaging at about $187. The potential low for this year could be around $170, while the upper limit might touch $252. This forecast is based on the assumption that Walmart’s strategic initiatives, such as its e-commerce integration, international expansions, and partnerships with other major brands, will continue to attract more investors.

Walmart Share Price Prediction 2025

By 2025, Walmart’s share price is predicted to further increase, with an average of approximately $239. The minimum price for this year is projected at $222, and the maximum could soar to $304. The growth is attributed to Walmart’s continued focus on digital transformation, customer-centric approaches, and potential operations.

Walmart Share Price Prediction 2026

In 2026, the share price for Walmart is expected to average around $291. The year might see a minimum of $274 and a maximum of $356. This prediction takes into account Walmart’s market expansions, technological advancements, and the increasing global user base. 

Walmart Share Price Prediction 2027

For 2027, Walmart’s share price is forecasted to have an average of $343. The price could potentially drop to a minimum of $326 and rise to a maximum of $408. The company’s sustained growth, innovations in retail technology, and global outreach are factors contributing to this prediction.

Walmart Share Price Prediction 2028

Heading into 2028, the share price for Walmart might average at $395. The year’s minimum is anticipated at $378, with a possible peak at $460. The growth can be influenced by Walmart’s strategic investments, diversification of services, and a robust online presence.

Walmart Share Price Prediction 2029

By 2029, the share price for Walmart is projected to be around $447 on average. The year could see a low of $430 and a high of $512. The company’s endeavors in sustainability, global partnerships, and customer loyalty programs are expected to drive this growth.

Walmart Share Price Prediction 2030

Concluding the decade, in 2030, Walmart’s share price is anticipated to average at $499. The minimum for this year might be around $482, while the maximum could reach up to $564. 

Walmart Stock Price Target: Experts’ Opinions 

Analysts from Wall Street predict that Walmart’s stock has the potential to reach even greater heights in the upcoming year. According to TipRanks, out of 30 analysts, the majority are optimistic about the stock, giving it a ‘strong buy’ recommendation. They forecast an average 12-month price target of $178, marking a 10% increase from its present value of $161.

Interestingly, even the four analysts among the 30 who suggest a ‘Hold’ stance have set their target prices above the current market rate. Walmart’s Q2 results surpassed market predictions, with a 6.30% rise in same-store sales against the anticipated 4.04%. Moreover, the retail behemoth anticipates a 3% sales growth in Q3 and has revised its annual forecast, expecting a sales surge between 4% and 4.5%.

A notable highlight was the 24% surge in e-commerce net sales, driven primarily by pickup and delivery services. As of 2023, online transactions constitute 12.3% of Walmart’s total sales. This digital shift has provided Walmart with invaluable consumer insights, enabling them to customize their offerings and potentially boost online sales even further.

Arun Sundaram, a market analyst at CFRA, commented: “Walmart delivered yet another impressive quarter, prompting an upward revision in its annual forecast. As the focus shifts to the next fiscal year, we believe Walmart has multiple strategies in place to maintain its robust growth and enhance profit margins.”

Sam’s Club Gas Price Vs. Costco Gas Price

AAA states that gas starts as a base fuel, with retailers adding unique additives for engine protection. In 1990, the EPA required a minimum additive level for engine cleanliness. By 2004, some automakers introduced the “Top Tier” gas standard for higher additive amounts. AAA’s tests showed that Top Tier gas reduced carbon deposits in engines by 19 times after 4,000 miles. 

Both AAA and EPA acknowledge its benefits for engine performance. Costco sells Top-tier gasoline with more detergents for engine cleanliness, unlike Sam’s Club. The difference in gas quality between the two is evident. The EPA focuses on emission-related standards, explaining why top-tier additives aren’t legally required despite their performance benefits.

Which Is Better, Costco or Sam’s Club?

Your choice between the two depends on your preferences, the products you purchase, and the proximity of the retailer to your home.

Both Sam’s Club and Costco operate similarly, offering comparable products to members only. The primary differences lie in the brands they stock, extra benefits, and membership fees, with Sam’s Club being slightly cheaper.

Conclusion

Warehouse retailers such as Costco and Sam’s Club cater to customers who prefer purchasing in bulk to achieve savings. However, the bulk-buying model might not be as effective online due to the challenges of delivering large quantities.

While these warehouse stores offer savings, they might not be suitable for those lacking adequate storage space, like a sizable freezer, or those who aren’t prepared for a heftier shopping bill compared to stores like Walmart. Even though items might be cheaper per unit at warehouse retailers, the total bill tends to be higher because customers buy in larger quantities.

For many, the decision between Costco and Sam’s Club boils down to proximity. Beyotnd that, membership and product costs are comparable between the two. The overall shopping experience might also influence a customer’s preference.