Wesfarmers Limited (WES)
All research reports and stock updates for Wesfarmers Limited.
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Research Reports

It ain't broke
Change of recommendation. Our expectation of slowing sales growth at Bunnings is playing out, but earnings are barely being dented.

Bunkering down
The annual Wesfarmers Strategy Day presented a resilient company able to withstand a softening consumer spending environment.

Bunnings hits a snag
We anticipate a slowing sales profile and rising costs will shrink margins and earnings for Wesfarmers in FY23f.

Catching up online with OnePass
We recently downgraded our recommendation to Sell on the premise of flat sales at Bunnings for the next three years. The company strategy day did not change our thinking and revealed a cautious approach to group online capability.

No sizzle
Bunnings dominates Wesfarmers’ earnings, even more so following the exit from Coles, but the homewares powerhouse is out of puff.

Out of steam
Gravity has got hold of Wesfarmers’ earnings after a stellar FY21. The interim result was pre-flagged in January, particularly warning on Kmart, but the earnings normalisation has spread across other divisions as well.

Kmart KO'd by COVID
Wesfarmers’ earnings update signalled the toll that COVID-19 has taken on Kmart as sales have stuttered and costs have soared. The retail-centric WES continues to muscle up its group infrastructure for future online trading, but with rising supply chain costs weighing in, lower margins are likely to be entrenched for Kmart.

Retail fatigue
Wesfarmers’ key retail businesses – Bunnings, Kmart, Target and Officeworks – are beginning to experience some retail fatigue. These businesses have enjoyed an extended period of super-sales throughout the COVID-19 pandemic, but sales are beginning to fade and this will continue over the next 18 months in our view. WES has acquisition capacity of up to $10 billion but has been reluctant to deploy it to any great extent so far.