How has the Wesfarmers (ASX:WES) share price been performing since reporting results?

We look at how the conglomerate’s shares have been travelling recently

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The Wesfarmers Ltd (ASX: WES) share price edged higher on Friday, up 0.53% to $57.28. In comparison, the S&P/ASX 200 Index (ASX: XJO) fell 0.76% to 7,403 points.

However, when looking from late August, the share price paints a different picture.

Below, we recap on Wesfarmers most recent result and how its shares have performed since.

What did Wesfarmers report for FY21?

Wesfarmers delivered its full-year results for the 2021 financial year to investors before market open on 27 August. The Wesfarmers share price closed the previous day at a near all-time high of $63.96.

Across the board, Wesfarmers recorded a robust performance with growth in several key metrics. This included:

  • Revenue from continuing operations up 10% on the prior corresponding period to $33,941 million;
  • Earnings before interest and tax (EBIT) from continuing operations jumped 18.8% to $3,776 million;
  • Net profit after tax lifted 16.2% to $2,421 million; and
  • Fully franked final dividend of 90 cents per share, bringing the full-year dividend to 178 cents apiece, up 17.1% year-on-year.

The strong result largely came from the company’s Bunnings and Kmart Group businesses, with Officeworks slightly behind.

Wesfarmers managing director Rob Scott commented:

Bunnings, Kmart Group and Officeworks delivered strong sales and earnings growth for the year. While customer demand remained resilient, sales growth in Bunnings, Officeworks and Catch moderated from mid-March as the businesses began to cycle elevated demand following the onset of COVID-19 in the prior year.

Pleasingly, sales growth from mid-March remained strong on a two-year basis across all of the Group’s retail businesses.

How has the Wesfarmers share price reacted?

On the day of the annual report, Wesfarmers shares fell 2.75% to finish at $62.20. The following week was not so kind to the conglomerate’s shares as they fell consecutively to register a loss of 7.27% from 30 August to 3 September.

Since then, Wesfarmers shares have had mixed trading days.

The Wesfarmers share price has lost around 10% over the last 3 weeks, while the S&P/ASX 200 Index(ASX: XJO) has fallen just 1.5%.

A number of brokers weighed in after the company released its full-year results.

Analysts at Macquarie slapped a “neutral” rating on the Wesfarmers share price, cutting its outlook by 3.3% to $61.35. On the other hand, Morgans and Credit Suisse raised their price targets by 5.2% to $59.00 and 2% to $59.91, respectively.

However, the most recent broker note came from Citi which also raised its view on Wesfarmers shares by 4.3% to $49.00. Based on the current share price, this implies a downside of around 15% on Citi’s assessment.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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