The Wesfarmers share price tumbled 15% in the March quarter. What’s next?

The Wesfarmers share price had a pretty miserable March quarter. But what does the future hold?

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Key points

  • Wesfarmers had a pretty miserable time over the three months to 31 March 
  • This ASX 200 conglomerate rarely suffers pullbacks, but went down by 15% over the quarter 
  • So what's next for Wesfarmers shares? 

The S&P/ASX 200 Index (ASX: XJO) ended up having a positive, if spectacularly volatile, first quarter of 2022. For the three months to 31 March, the ASX 200 gained 0.7%. But the same cannot be said of the Wesfarmers Ltd (ASX: WES) share price. 

Wesfarmers shares had a quarter to forget. This ASX 200 industrial and retail conglomerate started the year at $59.30 a share. But by 31 March, Wesfarmers had fallen to just $49.59 a share. That represents a steep loss of 14.99%. This is a rather unusual performance for Wesfarmers, which has traditionally been rewarded with a strong and steady share price performance from investors, not to mention a healthy price-to-earnings (P/E) multiple.

But since the owner of Target, OfficeWorks, Kmart, and Bunnings hit a new all-time high of just over $66 a share in August last year, we have now seen investors shave more than a quarter off of the Wesfarmers share price.

So after these rather steep falls, what does the market have in store for Wesfarmers going forward? Well, we can’t of course know for sure. But let’s take a look at what some top ASX brokers reckon.

Is the Wesfarmers share price a buy today?

As we covered yesterday, Morgans is one broker who is bullish on Wesfarmers shares right now. Morgans currently rates Wesfarmers as an add, with a 12-month share price target of $58.50. That implies a potential upside of almost 19% over the coming year. 

Morgans loves the company’s “highly regarded management team”, and reckons Wesfarmers has “one of the highest quality retail portfolios in Australia”. The broker assesses the company’s balance sheet as healthy and has told investors that the recent weakness in the Wesfarmers share price is a “good entry point for long-term investors”.

It is also foreseeing strong dividend growth from the ASX 200 share over the next few years. It has pencilled in dividends worth $1.62 per share for FY2022 and $1.81 per share for FY2023.

No doubt that will be music to existing Wesfarmers shareholders’ ears. But we’ll have to wait and see if these optimistic projections indeed come to pass. 

In the meantime, the Wesfarmers share price currently gives this ASX 200 share a market capitalisation of $56 billion, with a dividend yield of 3.45%. 

Motley Fool contributor Sebastian Bowen 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 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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