tiprankstipranks
Trending News
More News >
Wesfarmers Limited (AU:WES)
ASX:WES
Advertisement

Wesfarmers Limited (WES) AI Stock Analysis

Compare
266 Followers

Top Page

AU:WES

Wesfarmers Limited

(Sydney:WES)

Rating:75Outperform
Price Target:
AU$95.00
▲(3.95% Upside)
Wesfarmers Limited's overall stock score is driven by its strong financial performance and positive earnings call highlights. Despite a stretched valuation and some technical indicators suggesting an overbought condition, the company’s strategic initiatives and robust operational performance across key segments provide a solid growth outlook.
Positive Factors
Earnings Performance
WES reported strong 2H24/FY24 results with FY24 group revenue of A$44.2B +1.5% YoY and group EBIT of A$4.0B +3.3% YoY.
Market Position
Wesfarmers continues to gain market share and maintain resilient margins.
Negative Factors
Growth Outlook
The Bunnings segment has shown a softer outlook with a first 8-week run-rate below expected growth.

Wesfarmers Limited (WES) vs. iShares MSCI Australia ETF (EWA)

Wesfarmers Limited Business Overview & Revenue Model

Company DescriptionWesfarmers Limited (WES) is a prominent Australian conglomerate headquartered in Perth, Western Australia. It operates diverse businesses across various sectors, including retail, chemicals, energy, and fertilizers, industrial and safety products, and more. The company is renowned for its substantial retail operations, which encompass well-known brands such as Bunnings Warehouse, Kmart, Target, and Officeworks. Through its multifaceted divisions, Wesfarmers serves a broad customer base both domestically and internationally, focusing on delivering quality products and services.
How the Company Makes MoneyWesfarmers Limited generates revenue through several key streams. The retail division is a primary contributor, with Bunnings Warehouse, Kmart, Target, and Officeworks forming the backbone of its retail operations, offering a wide range of consumer goods from home improvement products to apparel and office supplies. The company's industrial division provides chemicals, energy, and fertilizers, catering to various industries. Additionally, Wesfarmers' industrial and safety segment supplies products and services related to workplace safety and industrial applications. Strategic partnerships, efficient supply chain management, and a strong brand presence further bolster earnings, while the company continually seeks growth opportunities through acquisitions and expansion into new markets.

Wesfarmers Limited Earnings Call Summary

Earnings Call Date:Aug 27, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Feb 18, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance, particularly in the Bunnings and Kmart Group, and successful portfolio management. However, challenges in the Industrial and Safety division and losses in the lithium business were notable concerns. The strategic moves to improve efficiency and growth in digital and health sectors are positive indicators for future performance.
Q2-2025 Updates
Positive Updates
Strong Financial Performance
Wesfarmers reported a net profit after tax of $1.5 billion, an increase of 2.9%, with a fully franked dividend of $0.95 per share, up 4.1% from the prior period.
Bunnings and Kmart Group Growth
Bunnings and Kmart Group both contributed significantly to earnings growth, with Bunnings' sales increasing by 3.1% and Kmart Group's earnings rising by 7.2%.
Portfolio Management Success
The sale of Coregas for $770 million and the wind down of Catch were highlighted as strategic moves to enhance shareholder returns.
Environmental and Community Contributions
Wesfarmers achieved a 2.5% reduction in Scope 1 and 2 emissions and contributed $55 million to community organizations.
Progress in Health and Digital Initiatives
Encouraging progress in the Health division's Consumer segment and ongoing investments in the OneDigital platform were noted as key growth areas.
Negative Updates
Challenges in Industrial and Safety Division
Revenue in the Industrial and Safety division declined by 1.9% due to challenging economic conditions, with earnings decreasing by 8.2%.
Lithium Business Losses
WesCEF's lithium business reported a loss of $24 million, attributed to lower market pricing and higher production costs during the ramp-up phase.
Catch Business Wind Down Costs
The wind down of Catch is expected to incur costs between $50 million and $60 million, impacting future financial results.
Company Guidance
In the Wesfarmers 2025 Half Year Results Briefing, several key metrics were highlighted to showcase the group's performance and future outlook. The company reported a net profit after tax of $1.5 billion, reflecting a 2.9% increase, and declared a fully franked dividend of $0.95 per share, which is a 4.1% rise from the previous period. Bunnings and Kmart Group demonstrated strong performance, with sales and earnings growth driven by their value credentials and proactive productivity initiatives. Bunnings achieved a sales growth of 3.1%, while Kmart Group's earnings increased by 7.2%. The Chemicals business within WesCEF saw favorable outcomes, and the Covalent JV made significant progress at the Kwinana lithium hydroxide refinery, with construction 95% complete. The Health division continued its transformation, although wholesale segments faced higher supply chain costs. The group maintained a strong balance sheet with net financial debt decreasing by $400 million and a cost of funds at 3.92%. The outlook remains positive with continued investment in growth opportunities, including the retail media network and digital capabilities, and cautious optimism for the lithium project amidst a challenging economic environment.

Wesfarmers Limited Financial Statement Overview

Summary
Wesfarmers Limited demonstrates strong financial health with consistent revenue growth, solid profitability, and effective cash flow management. The company shows robust cash conversion capabilities and impressive returns on equity, though it maintains moderate leverage.
Income Statement
85
Very Positive
Wesfarmers Limited has shown a steady growth in revenue, with a revenue growth rate of approximately 1.45% from 2023 to 2024. The gross profit margin is strong at 34.56%, and the net profit margin is healthy at 5.80%. The EBIT and EBITDA margins are 8.42% and 12.61%, respectively, indicating solid core profitability and operational efficiency.
Balance Sheet
75
Positive
The company maintains a moderate debt-to-equity ratio of 1.31, highlighting a balanced approach to leveraging equity with debt. The return on equity stands at 29.79%, reflecting strong profitability relative to shareholder equity. However, the equity ratio is 31.44%, indicating a moderate reliance on external financing.
Cash Flow
78
Positive
Wesfarmers has demonstrated positive cash flow generation with a free cash flow growth rate of 21.68% from 2023 to 2024. The operating cash flow to net income ratio is 1.80, signifying robust cash generation relative to net income. The free cash flow to net income ratio is 1.38, underscoring the company's strong cash conversion capabilities.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue44.05B43.42B36.68B33.80B30.75B
Gross Profit15.22B6.48B5.83B5.91B4.93B
EBITDA5.55B5.55B5.04B5.12B4.06B
Net Income2.56B2.46B2.35B2.38B1.70B
Balance Sheet
Total Assets27.31B27.14B28.05B26.88B26.02B
Cash, Cash Equivalents and Short-Term Investments835.00M673.00M705.00M3.02B2.91B
Total Debt11.28B11.17B12.08B10.13B9.90B
Total Liabilities18.72B18.86B20.07B17.17B16.67B
Stockholders Equity8.59B8.28B7.98B9.71B9.34B
Cash Flow
Free Cash Flow3.52B2.89B1.16B2.51B3.68B
Operating Cash Flow4.59B4.18B2.30B3.38B4.55B
Investing Cash Flow-1.37B-552.00M-1.19B-642.00M642.00M
Financing Cash Flow-3.06B-3.66B-3.43B-2.63B-3.07B

Wesfarmers Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price91.39
Price Trends
50DMA
85.86
Positive
100DMA
82.71
Positive
200DMA
77.54
Positive
Market Momentum
MACD
2.16
Negative
RSI
60.39
Neutral
STOCH
67.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:WES, the sentiment is Positive. The current price of 91.39 is above the 20-day moving average (MA) of 89.31, above the 50-day MA of 85.86, and above the 200-day MA of 77.54, indicating a bullish trend. The MACD of 2.16 indicates Negative momentum. The RSI at 60.39 is Neutral, neither overbought nor oversold. The STOCH value of 67.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:WES.

Wesfarmers Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$103.71B40.2130.35%2.21%3.04%3.65%
61
Neutral
$17.75B12.56-5.49%3.02%1.43%-14.12%
$5.00B15.529.58%
€645.50M20.368.55%
77
Outperform
AU$4.20B18.9616.46%6.40%4.83%-7.62%
75
Outperform
AU$12.58B27.5029.12%2.11%10.03%5.38%
74
Outperform
AU$3.44B17.7714.01%4.59%-27.48%-27.96%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:WES
Wesfarmers Limited
91.68
16.56
22.05%
HNORF
Harvey Norman Holdings Ltd
3.55
0.31
9.57%
DE:30M
Myer Holdings Limited
0.37
-0.09
-19.57%
AU:JBH
JB Hi-Fi Limited
116.75
40.63
53.38%
AU:SUL
Super Retail Group Limited
18.58
2.12
12.88%
AU:PMV
Premier Investments Limited
21.98
-4.14
-15.85%

Wesfarmers Limited Corporate Events

Wesfarmers to Announce 2025 Full-Year Results on August 28
Jul 30, 2025

Wesfarmers Limited has announced that it will release its 2025 full-year financial results on August 28, 2025. The announcement will be followed by an analyst briefing, which will be webcast for stakeholders, indicating the company’s commitment to transparency and engagement with the financial community.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

Wesfarmers Completes Sale of Coregas for $770 Million
Jul 1, 2025

Wesfarmers Limited has completed the sale of its subsidiary, Coregas, to Nippon Sanso Holdings Corporation for $770 million. This transaction is expected to result in a pre-tax profit of approximately $230 million to $260 million for Wesfarmers, which will be reflected in their 2025 financial year results, potentially impacting the company’s financial performance and market positioning positively.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

Wesfarmers Sells BWP Management, Resets Bunnings Leases
Jun 27, 2025

Wesfarmers announced the internalization of BWP Trust’s management by selling its 100% interest in BWP Management Limited to BWP for $142.6 million. This transaction includes a lease reset for Bunnings, extending the tenure of 62 sites and allowing for capital investment to enhance and expand select locations. The internalization allows BWP to operate as an independently managed trust, while Wesfarmers’ stake in BWP will increase to 23.5%. This strategic move is expected to provide greater certainty and support long-term growth for Bunnings.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

Wesfarmers Proposes Strategic Changes for BWP Trust
Jun 27, 2025

Wesfarmers Limited has announced a proposal involving the internalization of management functions of BWP Trust, restructuring of Bunnings leases, and commitments to capital expenditure for store expansion and network upgrades. This proposed transaction requires approval from investors and aims to impact the company’s operations and stakeholder interests, with a focus on enhancing the BWP property portfolio’s value and efficiency.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

BWP Trust Announces Strategic Internalization and Lease Reset
Jun 27, 2025

BWP Management Limited, as the responsible entity of the BWP Trust, has announced a significant transaction involving the internalization of BWP and a lease reset and capital investment with Bunnings. This move is aimed at enhancing the growth platform for the BWP Trust and BWP Property Group, although the presentation notes that the information provided is not exhaustive and should be read alongside other financial documents and disclosures. The announcement is expected to impact the company’s operations and industry positioning, with potential implications for stakeholders, although these are subject to uncertainties and risks.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

Wesfarmers Proposes Strategic Overhaul for BWP Trust
Jun 27, 2025

Wesfarmers Limited has announced a significant proposal involving the BWP Trust, which includes internalizing management functions, resetting Bunnings leases, and committing to capital investments. This move is expected to enhance tenant retention, income certainty, and lease expiries, while also reducing operating costs and aligning BWP with market standards for REIT management. The proposal is anticipated to improve BWP’s market position, offering potential valuation uplift and distribution accretion, thereby providing a platform for future growth and diversified income streams.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

Wesfarmers Finalizes Sale of Coregas to Nippon Sanso
Jun 26, 2025

Wesfarmers Limited has announced the unconditional sale of its subsidiary, Coregas, to Nippon Sanso Holdings Corporation for $770 million, with the transaction expected to complete in July 2025. This sale is anticipated to result in a pre-tax profit of approximately $230 million to $260 million, impacting the company’s financial results for the 2025 fiscal year.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

Wesfarmers Raises EUR600 Million in Oversubscribed Eurobond Issuance
Jun 3, 2025

Wesfarmers Limited has successfully priced EUR600 million in seven-year senior unsecured notes, which will mature in June 2032. The issuance, under the company’s EUR 3 billion Euro Medium Term Note Programme, was heavily oversubscribed, reflecting strong investor demand in European and Asian markets. The proceeds, to be swapped into Australian dollars, will be used for general corporate purposes, taking advantage of favorable market conditions and diversifying the company’s debt maturity profile. The notes will be listed on the Singapore Exchange but not offered to retail investors in Australia.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

Leadership Transition at Officeworks: John Gualtieri to Succeed Sarah Hunter
Jun 2, 2025

Wesfarmers Limited announced a leadership transition at Officeworks, with Sarah Hunter stepping down as Managing Director in August 2025, to be succeeded by John Gualtieri, the current CEO of Kmart and Target. This transition is seen as a strategic move to leverage Gualtieri’s extensive retail experience to drive Officeworks’ next phase of growth, focusing on strengthening omnichannel customer experiences and expanding technology and business-to-business operations.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

Wesfarmers Unveils Strategic Vision at 2025 Briefing Day
May 21, 2025

Wesfarmers Limited announced its 2025 Strategy Briefing Day presentation, scheduled for 22 May 2025, which will be webcasted for broader accessibility. This event is expected to provide insights into the company’s strategic direction and operational plans, potentially impacting its market positioning and stakeholder engagement.

The most recent analyst rating on (AU:WES) stock is a Hold with a A$69.00 price target. To see the full list of analyst forecasts on Wesfarmers Limited stock, see the AU:WES Stock Forecast page.

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.Date of analysis: Jun 05, 2025