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Wesfarmers Limited
(Sydney:WES)
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Rating:73Outperform
Price Target:
AU$101.00
▲(15.76% Upside)
Action:Reiterated
Date:03/26/26
The score is driven primarily by strong underlying financial performance and cash generation, supported by attractive valuation (moderate P/E and strong dividend yield). This is partially offset by weak technicals (price below major moving averages with negative momentum) and near-term execution risks highlighted on the earnings call (Officeworks costs, lithium ramp-up issues, and higher net debt).
Positive Factors
Free Cash Flow Strength
Material FCF growth and strong cash conversion provide durable funding for dividends, capex and strategic investments. Consistent cash generation supports capital returns and balance sheet resilience, enabling investment in productivity and new formats without immediate equity raises.
Negative Factors
Officeworks Transformation Costs
Ongoing ERP and operating-model transition creates recurring one‑off costs and near‑term margin pressure. Delays or execution issues could defer structural cost benefits to FY27+, compressing earnings and requiring sustained management focus to realize long‑term efficiency gains.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Material FCF growth and strong cash conversion provide durable funding for dividends, capex and strategic investments. Consistent cash generation supports capital returns and balance sheet resilience, enabling investment in productivity and new formats without immediate equity raises.
Read all positive factors
Wesfarmers Limited (WES) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$93.51B
Dividend Yield4.35%
Average Volume (3M)1.52M
Price to Earnings (P/E)30.5
Beta (1Y)0.96
Revenue Growth3.17%
EPS Growth17.80%
CountryAU
Employees120,000
SectorConsumer Cyclical
Sector Strength84
IndustryHome Improvement
Share Statistics
EPS (TTM)2.70
Shares Outstanding1,135,282,700
10 Day Avg. Volume1,494,685
30 Day Avg. Volume1,520,740
Financial Highlights & Ratios
PEG Ratio2.32
Price to Book (P/B)10.46
Price to Sales (P/S)2.11
P/FCF Ratio28.09
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$77.45Price Target Upside-11.24% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering11
EPS Forecast (FY)2.77
Revenue Forecast (FY)AU$49.50B
Wesfarmers Limited Business Overview & Revenue Model
Company Description
Wesfarmers Limited is a diversified conglomerate operating retail and industrial businesses across Australia, New Zealand, the United Kingdom, and globally. Its extensive retail footprint includes Bunnings, offering building materials, home and ga...
How the Company Makes Money
Wesfarmers makes money primarily by operating large-scale retail businesses and earning revenue from the sale of goods and related services across its portfolio. The largest revenue streams come from: (1) Bunnings, which generates sales from home ...
Wesfarmers Limited Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 27, 2026
Earnings Call Sentiment Positive
The results show material progress across multiple fronts: solid NPAT growth (+9.3%), dividend increase, strong performances at Bunnings, Kmart Group, WesCEF (including first positive lithium contribution) and Health (Priceline sales +14.4%). Cash generation was strong and sustainability metrics improved meaningfully. Near‑term challenges include Officeworks' transformation costs and earnings decline, Covalent refinery ramp‑up and odor remediation delaying full lithium upside, some commodity and regional trading headwinds (Target apparel, Kleenheat), and higher net debt following capital returns. Management emphasizes productivity and AI/digital investments to offset price investment and support long‑term growth. Overall, positive operational momentum and disciplined capital management outweigh the identifiable near‑term execution and ramp‑up risks.Positive Updates
Net Profit After Tax Growth
Group NPAT increased 9.3% to $1.6 billion for the half, driven by strong earnings from Bunnings, Kmart Group and growth platforms Lithium and Health.
Negative Updates
Officeworks Earnings Decline and Transformation Costs
Officeworks earnings fell $19 million to $68 million despite sales +4.7%; earnings were impacted by $15 million of one‑off transformation costs in the half and a further ~$25 million of one‑off costs expected in H2 as it transitions to a low‑cost operating model.
Read all updates
Q2-2026 Updates
Positive
Negative
Net Profit After Tax Growth
Group NPAT increased 9.3% to $1.6 billion for the half, driven by strong earnings from Bunnings, Kmart Group and growth platforms Lithium and Health.
Read all positive updates
Company Guidance
Management's guidance and forward commentary highlighted a fully franked interim dividend of $1.02 per share (up 7.4%) and the $1.50 per‑share capital distribution paid in December, net financial debt of $4.9bn post distributions with c.$1.3bn of committed unused bank facilities, an average cost of funds of 3.6% (down from 3.8%), and a debt/EBITDA ratio of 1.9x (from 1.7x); group net capital expenditure for FY26 is guided at $1.0–$1.3bn (excluding BPI sale proceeds), divisional cash realization remained strong at 103%, operating cash flow was ~A$2.5bn (down 3.3%) while free cash flow rose 35.6% to A$2.75bn. Near‑term trading commentary was positive: the first six weeks of H2 saw Bunnings and Officeworks broadly in line with H1 and stronger Kmart Group sales; lithium/WesCEF earnings are expected to be profitable and “slightly above” H1 (H1 lithium EBIT A$6m) as the Covalent refinery continues ramp‑up (odor remediation due mid‑calendar year and ramp‑up costs expected to remain capitalized through FY26); Officeworks expects a further ≈A$25m of one‑off transformation/ERP costs in H2 with structural benefits from FY27, and the group reiterated focus on productivity/AI, training for ~120,000 team members and maintaining investment‑grade credit metrics.Wesfarmers Limited Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
78
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 46.29B | 45.58B | 44.05B | 43.42B | 36.68B | 33.80B |
| Gross Profit | 7.09B | 15.64B | 15.22B | 6.48B | 5.83B | 5.91B |
| EBITDA | 6.10B | 6.04B | 5.55B | 5.55B | 5.04B | 5.12B |
| Net Income | 3.06B | 2.93B | 2.56B | 2.46B | 2.35B | 2.38B |
Balance Sheet | ||||||
| Total Assets | 28.85B | 27.98B | 27.31B | 27.14B | 28.05B | 26.88B |
| Cash, Cash Equivalents and Short-Term Investments | 729.00M | 638.00M | 835.00M | 673.00M | 705.00M | 3.02B |
| Total Debt | 18.65B | 11.17B | 11.28B | 11.17B | 12.08B | 10.13B |
| Total Liabilities | 20.99B | 18.79B | 18.72B | 18.86B | 20.07B | 17.17B |
| Stockholders Equity | 7.86B | 9.19B | 8.59B | 8.28B | 7.98B | 9.71B |
Cash Flow | ||||||
| Free Cash Flow | 3.31B | 3.42B | 3.52B | 2.89B | 1.16B | 2.51B |
| Operating Cash Flow | 4.48B | 4.57B | 4.59B | 4.18B | 2.30B | 3.38B |
| Investing Cash Flow | -318.00M | -1.12B | -1.37B | -552.00M | -1.19B | -642.00M |
| Financing Cash Flow | -3.92B | -3.64B | -3.06B | -3.66B | -3.43B | -2.63B |
Wesfarmers Limited Technical Analysis
Negative
87.25
Price Trends
88.77
Negative
82.06
Positive
81.02
Positive
Market Momentum
-1.30
Positive
26.91
Positive
12.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:WES, the sentiment is Negative. The current price of 87.25 is below the 20-day moving average (MA) of 88.27, below the 50-day MA of 88.77, and above the 200-day MA of 81.02, indicating a neutral trend. The MACD of -1.30 indicates Positive momentum. The RSI at 26.91 is Positive, neither overbought nor oversold. The STOCH value of 12.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:WES.
Wesfarmers Limited Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | AU$93.51B | 30.51 | 35.93% | 4.11% | 3.17% | 17.80% | |
70 Neutral | AU$3.01B | 14.67 | 16.02% | 7.83% | 3.19% | -7.17% | |
68 Neutral | AU$7.57B | 15.45 | 29.54% | 5.46% | 4.82% | 5.95% | |
63 Neutral | AU$5.64B | 10.07 | 11.55% | 6.00% | 9.50% | 29.80% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | AU$1.84B | 14.26 | 31.92% | 3.52% | -30.67% | -24.10% | |
45 Neutral | AU$362.83M | -1.19 | -22.14% | 6.38% | 30.31% | -737.99% |
* Consumer Cyclical Sector Average
AU:WES
Wesfarmers Limited
82.37
-5.90
-6.68%
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Wesfarmers Limited Corporate Events
Wesfarmers Sets Date for 2026 Full-Year Results and Analyst Briefing
Jul 29, 2026
Wesfarmers has advised the market that it will release its full-year results for the 2026 financial year on 27 August, setting expectations for investors ahead of the key earnings update. The timing signals when shareholders and analysts will gain...
Wesfarmers to Double Output at Mt Holland Lithium Project
Jul 21, 2026
Wesfarmers and SQM have approved a major expansion of the Mt Holland lithium project in Western Australia, doubling nameplate spodumene concentrate output from about 380,000 to 760,000 tonnes per year. The plan includes a new ore sorting facility ...
Wesfarmers to Outline Future Direction at 2026 Strategy Briefing Day
Jun 9, 2026
Wesfarmers Limited has announced that it will hold its 2026 Strategy Briefing Day in Sydney on 10 June 2026, with proceedings commencing at 6:30am AWST and 8:30am AEST. The briefing, which will be webcast via the company’s website, will incl...
Wesfarmers Names Kenneth MacKenzie as Future Director, Discloses Indirect Shareholding
Jun 5, 2026
Wesfarmers Limited has announced the appointment of Kenneth Norman MacKenzie as a director effective 1 June 2026, with the filing detailing his initial interests in the company’s securities. The notice confirms that MacKenzie holds no shares...
Wesfarmers folds Industrial and Safety units into Bunnings to boost commercial growth
Jun 1, 2026
Wesfarmers will transfer its Industrial and Safety businesses, Blackwoods and Workwear Group, into the Bunnings Group to align complementary customer bases and strengthen commercial capabilities. The move is aimed at enhancing customer value propo...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.