This retail giant reached dizzying new heights today, but it might not be for the reason you think it is.
The post What a Wednesday! Wesfarmers (ASX:WES) share price hits new all-time high appeared first on The Motley Fool Australia. –
The S&P/ASX 200 Index (ASX: XJO) is having a great day so far this Wednesday. The ASX 200 is currently up a hefty 0.9% to 7,317 points. Happy hump day! One ASX 200 blue chip share is doing even better though. That would be the giant industrial conglomerate Wesfarmers Ltd (ASX: WES). At the time of writing, the Wesfarmers share price is up a very healthy 2.66% to $61.47 a share.
But wait, there’s more. Earlier today, Wesfarmers managed to hit $61.70 a share. That’s a new 52-week, and all-time high for the company.
Wesfarmers shares are now up 19.65% year to date in 2021 so far, as well as 31.4% over the past 12 months.
What a Wednesday for Wesfarmers!
So why are Wesfarmers shares trading so well today? Well, it isn’t to do with anything that’s come out from the company itself. But there have been a number of recent developments that may be fuelling this fire.
Lithium is hot property on the ASX at the present time. Lithium shares like Pilbara Minerals Ltd (ASX: PLS) have had an incredible year of performance. But Wesfarmers has exposure to this space too. Last Friday, it announced that it had received ministerial approval for its Mt Holland lithium project, the last major impediment to the project coming online. This is one reason which might be feeding into Wesfarmers shares today.
Investors also seem to be charmed by the recent announcement that Wesfarmers is attempting to acquire Priceline Pharmacy-owner Australian Pharmaceutical Industries Ltd (ASX: API). Since that announcement on 12 July, Wesfarmers shares are up almost 6%.
Finally, the recent expansion of COVID-induced lockdowns across the country has concentrated attention back on both ‘pandemic winners’ and ‘pandemic losers’. Wesfarmers managed to put itself firmly in the former basket last year, when its Officeworks and Bunnings retail chains experienced strong sales growth during lockdowns. It’s possible investors are remembering this fact, now that lockdowns are unfortunately back with us.
It’s possible that a combination of these factors is what has pushed the Wesfarmers share price to its new all-time high today.
Are Wesfarmers shares still buy at all-time highs?
Wesfarmers is well regarded in the ASX community for its decades of impressive performance. But will the good times continue to roll at these new share price heights?
One broker who doesn’t think there’s too much upside left in the tank is Citi. As my Fool colleague James revealed earlier this week, Citi currently has a ‘sell’ rating on Wesfarmers shares, with a 12-month share price target of $45 a share. He revealed that Citi was pretty blasé about the API acquisition, and expects Wesfarmers will need to continue to make acquisitions to “boost its post-pandemic growth”.
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 May 24th 2021
Why the Wesfarmers (ASX:WES) share price just hit a new all-time high
ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher
Motley Fool contributor Sebastian Bowen 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.