Insights

Broker gives its verdict on the Wesfarmers (ASX:WES) share price

Is it too late to buy Wesfarmers’ shares?
The post Broker gives its verdict on the Wesfarmers (ASX:WES) share price appeared first on The Motley Fool Australia. –

The Wesfarmers Ltd (ASX: WES) share price is edging higher on Monday afternoon.

At the time of writing, the conglomerate’s shares are up 0.3% to $57.95.

This means Wesfarmers’ shares are now up a decent 12.5% since the start of the year.

Is the Wesfarmers share price still good value?

Unfortunately, one leading broker believes the Wesfarmers share price could have peaked for the time being.

According to a note out of Citi from last week, its analysts have retained their sell rating but lifted their price target slightly to $49.00.

Based on the current Wesfarmers share price, this implies potential downside of approximately 15.5% over the next 12 months.

What did the broker say?

While Citi notes that Wesfarmers delivered a result in line with its expectations in FY 2021, it has concerns about the year ahead. This is due to the company cycling a strong sales period and facing lengthy COVID-related store closures.

The broker commented: “Wesfarmers delivered an in line result, reporting $2,421 million in underlying NPAT for FY21. Store closures and cycling of a strong sales base presents challenges in FY22e.”

In addition, Citi highlights that Wesfarmers’ retail businesses are facing a number of headwinds.

It explained: “The result featured many topics familiar to retailers: supply-chain disruptions, rising freight and commodity costs, transition to online, and increasing investment in digital and automation.”

And while it was pleased with its capital return announcement, it simply isn’t enough for a more positive rating due to the current Wesfarmers share price valuation.

Citi concluded: “The company announced a $2.3 billion capital return program. We upgrade earnings and Target Price to $49.00 on better-than-expected result from Kmart Group but maintain Sell on valuation grounds.”

The post Broker gives its verdict on the Wesfarmers (ASX:WES) share price appeared first on The Motley Fool Australia.

Should you invest $1,000 in Wesfarmers right now?

Before you consider Wesfarmers, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Wesfarmers wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Wesfarmers (ASX:WES) share price in focus as Bunnings and Officeworks reopen Sydney stores
Top brokers name 3 ASX shares to sell next week

These were the worst performing ASX 200 shares last week

Why the Wesfarmers (ASX:WES) share price is down 9% in the last week
These ASX 200 dividend shares increased their payouts this earnings season

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!