A lot of retail or 'mum and dad' type investors like to follow the tips of powerful sell side brokers in making their share market investment decisions. And they don't come any bigger or more powerful than Goldman Sachs, which last week tipped the Wesfarmers Ltd (ASX: WES) share price to fall to fall as low as $30.50 in the 12 months ahead.
If Goldmans is on the money that would mean the shares falling around 15% from the $35.80 which they change hands for today.
Recently investment conglomerate Wesfarmers sold its stake in supermarkets group Coles Group (ASX: COL) reportedly because it believed this cash cow's best growth days were behind it.
Since then it has made bids to acquire lithium miner Kidman Resources Ltd (ASX: KDR) and rare earths miner Lynas Corporation Ltd (ASX: LYC). On June 13 it also warned that sales at its discount department stores of Target and Kmart had also been softer-than-expected over the financial year.
The weak trading update for the department stores, among other things, has led Goldman's analysts to revise their earnings per share forecasts 2.2%, 5.8% and 8% lower for FY 2019 through to FY 2021.
Evidently Wesfarmers is a complicated business with many moving parts and is likely to continue dividing the bulls and bears in the years ahead.
