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Key points
- The Wesfarmers share price has descended more than 10% since the start of the year
- COVID-19 is impacting consumer confidence and retail sales
- The S&P/ASX 200 Consumer Discretionary Index has fallen almost 8% since 31 December
The Wesfarmers Ltd (ASX: WES) share price is plummeting this year.
The Western Australian-based conglomerate's share price has fallen 10.51% since market close on 31 December to finish this week trading at $53.07. It fell 2.27% today alone.
Let's take a look at what is impacting the company's shares in January.
What's going on with Wesfarmers?
The Wesfarmers share price has been on a steady decline since the start of the year with a few positive bumps along the way.
Retail shares have been falling amid declining consumer confidence due to the COVID-19 Omicron variant.
Early this week, an ANZ-Roy Morgan survey revealed consumer confidence had dropped 8.1 points to its lowest level since October 2020. This followed confidence falling 2.4 points in the first week of January.
The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ), which includes Wesfarmers, has fallen 7.77% since 31 December.
However, on Monday the Wesfarmers share price had a minor reprieve following the release of its half-yearly results up to 31 December.
The company anticipates its net profit after tax to decline by 12.5% to 16.5% compared to the previous corresponding period. Kmart and Target sales fell 10.3% due to COVID-19 restrictions and Target store closures. However, the results were in line with expectations.
Analysts at Citi maintained their sell rating on the company's shares this week with a $50 price target. That's 5.8% less than the current share price. Citi expressed concerns about consumer spending and increased COVID-19 costs.
However, there could be brighter days coming in the view of some analysts. Morgans upgraded Wesfarmers shares to a buy rating on Tuesday, describing the company as "high quality". The broker gave the company a price target of $60.80. That is 14.6% more than the current share price.
Wesfarmers share price snapshot
The Wesfarmers share price has returned 1.6% in the past 12 months. This week it has fallen 1.7%, while it has slumped 9.97% over the past month.
Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has returned 5.16% in the past year.
