Down 28% this year, is the Wesfarmers share price at a turning point?

Question is, did the share find a bottom last week or not?

| More on:
A woman sits at her computer in deep contemplation with her hand to her chin and seriously considering information she is receiving from the screen of her laptop regarding the Xero share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Wesfarmers share price found buyers at its 52-week lows last week, with the company reclaiming some gains this week
  • Broker sentiment is split between buys, holds, and sells
  • In the last 12 months, the Wesfarmers share price has fallen 28% into the red

The Wesfarmers Ltd (ASX: WES) share price has tumbled over the last month of trade, extending losses to more than 28% this year to date.

After a series of downward moves, the Wesfarmers share price fell to its 52-week closing low of $41.16 on 17 June, as illustrated on the chart below.

However, it’s since bounced from that level, currently trading at $42.32 at the time of writing.

TradingView Chart

Is Wesfarmers reversing course?

The share is still bottom-heavy and has some way to go before clawing back to its May 2022 levels.

Despite this, it still has five buy calls and five hold calls from brokers, according to Bloomberg data.

Balancing the picture is that six brokers also say to sell Wesfarmers shares.

In a note today, analyst Mohsen Crofts, from Bloomberg Intelligence, wrote that Bunnings and Kmart are Wesfarmers’ key assets in its long-term growth.

Crofts wrote:

Wesfarmers-owned hardware chain Bunnings’ brand and operational strength could increase its revenue and market share from 2023 once Australian housing stabilises with interest rates.

Earnings performance at Kmart, Wesfarmers’ discount department store brand, should improve this year as Covid-19 related costs and restrictions ease.

Meanwhile, analysts at JP Morgan echoed the sentiment in a May note. The broker said, “Wesfarmers is a beneficiary of the retail and housing cycle, with three industry leading retailers.”

“Following the downsizing of Target, acquisitions of Catch and Kidman, as well as a de-rating post capital return, the share price outlook is favourable.”

Wesfarmers share price snapshot

In the last 12 months, the Wesfarmers share price has slipped more than 28% into the red, dropping almost 10% in the last month alone.

The conglomerate has a market capitalisation of around $48 billion based on the current share price.

Motley Fool contributor Zach Bristow 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 has positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

asx share price increase represented by golden dollar sign rocketing out from white domes of lithium
Resources Shares

Why is the Pilbara Minerals share price having such a strong end to the week?

The lithium miner charged up on Friday.

Read more »

Group of people cheer around tablets in office
Technology Shares

These 3 ASX tech shares had a cracking day on the ASX today

Some ASX tech shares were on fire this Friday...

Read more »

Two smiling men in high visibility vests and yellow hardhats stand side by side with a large mound of earth and mining equipment behind them smiling as the Carnaby Resources share price rises today
Share Gainers

Why is the Piedmont Lithium share price off to such a great start in August?

Piedmont shares extend gains this week.

Read more »

A couple are shocked and elated at the good news they've just seen on their devices.
Share Gainers

Why Core Lithium, European Lithium, Incannex, and Qantas shares are pushing higher

These ASX shares are ending the week strongly...

Read more »

a man and woman agreeing to a deal with a handshake
Share Gainers

Guess which ASX lithium share is rocketing 18% on a new deal with BMW

The lithium explorer and near-term producer emerged from a trading halt this morning.

Read more »

Happy woman miner with her thumb up signalling Wyloo's commitment to back IGO's takeover of Western Areas nickel
Share Gainers

Why has the Lynas share price surged 22% in the last 3 weeks?

It's been a stellar run for the company since the start of FY23.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Appen, Centuria Industrial, NRW, and Sayona Mining shares are pushing higher

These ASX shares are pushing higher today...

Read more »

a man sits at his computer screen scrolling with his fingers with a satisfied smile on his face as though he is very content with the news he is receiving.
Share Gainers

Why is the Kogan share price kicking goals on Thursday?

Investors have been busy on the online retailer's shares these past few weeks.

Read more »