Wesfarmers Ltd (WES) is a conglomerate with broad business operations including home improvement and outdoor living, apparel and general merchandise, office supplies, and an industrials division with businesses in chemicals, energy, and fertilizers, and industrial and safety products. It reports its full-year numbers on the 20th of August.
Wesfarmers is well diversified to weather the coronavirus pandemic; its retail operations such as Bunnings and Officeworks have gone from strength to strength during the pandemic due to the working from home environment. On the other hand, its discount department stores Kmart and Target have struggled.
While the Victorian shutdown will continue to affect 168 stores in that state, it only impacts 17% of all Wesfarmers retails sales. Its online sales growth of 89% this calendar year from its retail stores and its specialty store Catch will provide significant offset.
Wesfarmers has a strong balance sheet, boosted by the successful sale of Coles last year which provides significant flexibility and support to the group's operating businesses. The consensus statutory EPS estimate is around 180 cents per share.
After suffering a ~35% fall during the Covid-19 crash, the share price of Wesfarmers recently traded to new all-time highs. Technically, the next layer of resistance comes from the big psychological round number at $50.00. While on the downside, dips over the past 6 weeks have been well supported towards $45.50.
Source Tradingview. The figures stated areas of the 14th of August 2020. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.