The Wesfarmers Ltd (ASX: WES) share price has surged 25% higher since the beginning of the year. This comes as the retail conglomerate has experienced improved trading conditions despite COVID-19 challenges.
At Wednesday's market close, Wesfarmers shares finished the day at $63.22. It's worth noting its shares reached a new all-time high of $67.20 last week before pulling back.
What happened to Wesfarmers shares last earnings season?
During the time when Wesfarmers reported its half-year results for FY21, its shares plummeted 10% within a matter of days. This came as investors appeared initially concerned about the company's second-half expectations.
However, the share price quickly rebounded in the following month, with the company touching new all-time highs thereafter.
Looking back at the results, Wesfarmers delivered revenue of $17,774 million, a 16.6% increase over the prior corresponding period. This came on the back of strong earnings from Bunnings, Kmart Group, and its chemicals, energy and fertilisers businesses.
Wesfarmers achieved earnings, before interest and tax (EBIT) of $2,137 million, up 23.2% compared to H1 FY20.
On the bottom line, the group posted a net profit after tax of $1,390 million, a 23.3% improvement.
Wesfarmers' Managing Director Rob Scott said:
Bunnings, Kmart Group and Officeworks delivered strong trading results for the half, reflecting their ability to adapt to changing customer preferences and provide a safe environment for customers and team members.
In line with Wesfarmers' objective of delivering superior and sustainable long-term returns, the retail divisions continued to invest in building deeper customer relationships and trust by providing greater value, service and convenience for customers during a period in which many Australian households faced significant challenges and uncertainty.
Is the Wesfarmers share price a buy?
A recent broker note released by Swiss investment firm UBS initiated Wesfarmers shares with a neutral rating at $62.00. Macquarie, on the other hand, raised its price target by 9.2% to $63.45.
Based on the current Wesfarmers share price, this is in line with both broker estimates.
Wesfarmers commands a market capitalisation of roughly $71.6 billion, with more than 1.1 billion shares on its books.
