Wesfarmers Limited (AU:WES)
ASX:WES
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Wesfarmers Limited
(Sydney:WES)
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Rating:73Outperform
Price Target:
AU$82.00
▲(11.67% Upside)
Action:ReiteratedDate: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
Strong free cash flow generation
A 35.6% rise in free cash flow to A$2.75bn, plus 103% divisional cash realisation, indicates durable cash conversion. This strengthens capital allocation flexibility for dividends, buybacks, and targeted capex, supporting long-term shareholder returns and investment capacity.
Negative Factors
Covalent refinery ramp-up delays and odor issues
Operational issues at the Covalent lithium refinery (odor remediation, extended ramp-up) delay full commercial production and margin capture from lithium. This pushes out expected earnings contributions and extends capitalised ramp costs, adding timing and execution risk to WesCEF's growth profile.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
A 35.6% rise in free cash flow to A$2.75bn, plus 103% divisional cash realisation, indicates durable cash conversion. This strengthens capital allocation flexibility for dividends, buybacks, and targeted capex, supporting long-term shareholder returns and investment capacity.
Read all positive factors
Wesfarmers Limited (WES) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$83.36B
Dividend Yield2.46%
Average Volume (3M)1.52M
Price to Earnings (P/E)14.3
Beta (1Y)1.03
Revenue Growth3.47%
EPS Growth14.36%
CountryAU
Employees120,000
SectorConsumer Cyclical
Sector Strength84
IndustryHome Improvement
Share Statistics
EPS (TTM)1.41
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$82.14Price Target Upside11.87% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)2.52
Revenue Forecast (FY)AU$47.26B
Wesfarmers Limited Business Overview & Revenue Model
Company Description
Wesfarmers Limited engages in the retail business in Australia, New Zealand, the United Kingdom, and internationally. The company is involved in the retail sale of building materials, home and garden improvement, and outdoor living products throug...
How the Company Makes Money
Wesfarmers makes money primarily by operating large-scale retail chains that sell goods to consumers and businesses, and by earning income from its industrial operations. Retail is driven by (1) home improvement and building supplies sales through...
Wesfarmers Limited Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 20, 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
73.43
Price Trends
79.57
Negative
79.90
Negative
82.50
Negative
Market Momentum
-1.83
Negative
34.33
Neutral
45.24
Neutral
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 73.43 is below the 20-day moving average (MA) of 74.40, below the 50-day MA of 79.57, and below the 200-day MA of 82.50, indicating a bearish trend. The MACD of -1.83 indicates Negative momentum. The RSI at 34.33 is Neutral, neither overbought nor oversold. The STOCH value of 45.24 is Neutral, 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$83.36B | 14.34 | 32.24% | 2.46% | 3.47% | 14.36% | |
71 Outperform | AU$2.90B | 8.69 | 16.46% | 7.20% | 4.83% | -7.62% | |
68 Neutral | AU$8.03B | 8.60 | 29.31% | 2.54% | 10.03% | 5.38% | |
63 Neutral | AU$6.07B | 6.72 | 10.92% | 3.73% | 5.09% | 46.94% | |
63 Neutral | AU$2.03B | 5.26 | 37.89% | 3.56% | -48.80% | -35.88% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
42 Neutral | AU$518.33M | 4.67 | -22.14% | 6.38% | 13.78% | -413.50% |
* Consumer Cyclical Sector Average
AU:WES
Wesfarmers Limited
73.43
2.67
3.77%
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-18.67%
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Wesfarmers Limited Corporate Events
Wesfarmers Updates Interim Dividend and DRP Terms for December Half
Mar 25, 2026
Wesfarmers Limited has updated its previously announced interim dividend details for the six-month period ended 31 December 2025 on its ordinary fully paid shares. The update, dated 25 March 2026, confirms changes to the dividend reinvestment plan...
Wesfarmers Sets $75.69 Allocation Price for 2026 Interim Dividend DRP
Mar 25, 2026
Wesfarmers Limited has set the allocation price for shares issued under its Dividend Investment Plan for the 2026 interim dividend at $75.6897, based on the average daily volume weighted average price over a 15-day trading period in March 2026. Th...
Wesfarmers Director Increases Indirect Shareholding via On-Market Purchase
Mar 13, 2026
Wesfarmers has disclosed a change in director Friedrich (Tom) von Oertzen’s indirect shareholdings, reflecting routine alignment of governance and ownership interests. Through Yellowfish Pty Ltd as trustee for the von Oertzen Family Super Fu...
Wesfarmers Updates Details on Upcoming Interim Dividend Payment
Feb 26, 2026
Wesfarmers has updated its notification to shareholders regarding an upcoming dividend on its ordinary fully paid shares, clarifying currency information previously disclosed and confirming key timetable dates. The dividend relates to the six mont...
Wesfarmers Updates Market on Director Alan Cransberg’s Equity Holdings
Feb 24, 2026
Wesfarmers has reported a change in the equity interests of non-executive director Alan John Cransberg under the company’s Non-Executive Director Equity Plan. The filing details a conversion of 454 unquoted rights into 454 ordinary shares, w...
Wesfarmers Sets Date for Release of 2026 Half-Year Results
Jan 19, 2026
Wesfarmers Limited has advised the market that it will release its 2026 half-year financial results on Thursday, 19 February 2026, with a subsequent analyst briefing scheduled the same day. The briefing will be webcast via the company’s webs...
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.