Is June a good time to buy Wesfarmers shares?

Are brokers calling Wesfarmers a buy or a sell today?

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Key points

  • Wesfaremers shares had a particularly bad last month, falling by more than 8%
  • Even so, the Wesfarmers share price remains up a healthy 6% or so in 2023 so far
  • One ASX broker reckons now is a great time to buy Wesfarmers, with a potential upside of 15%

Last week, we looked at Wesfarmers Ltd (ASX: WES) sales and how they performed over the month of May. Wesfaremrs ended up having a fairly disappointing fifth month of 2023, with the ASX 200 retail and industrial conglomerate losing a meaningful 8.27%, falling from $51.97 a share to $47.67.

That compares rather poorly against the S&P/ASX 200 Index (ASX: XJO), which lost 3% over the month just gone.

But it's now June and winter is upon us. So seeing as it's a new month and season, it's as good a time as any to take another look at Wesfarmers shares and whether this steep drop in value over May is a buying opportunity this June.

Wesfarmers has already kicked off the month on a decent footing. The company may be down 1.14% at the time of writing today to $48.22 a share. But Wesfarmers has still added around 1.16% over June so far, leaving its year-to-date goals in 2023 at a decent 6.1%:

But where might this conglomerate be heading to next?

Well, let's see what one of the ASX's top brokers has to say.

Are Wesfarmers shares a June buy today?

As my Fool colleague James covered just yesterday, ASX broker Morgans is eyeing off the recent slump in Wesfarmers shares as a buying opportunity. Morgans has given the Wesfarmers share price a 12-month target of $55.60 a share. That implies a potential upside of around 15% for investors in today's pricing.

Morgans is predicting that Wesfarmers is well placed to grow both its earnings and dividends over coming years, despite the economic and cost-of-living pressures in the economy. In fact, the broker is predicting that its low-cost Kmart chain in particular is "well placed for benefit" from the cost of living rises.

In terms of dividends, Morgans predicts that Wesfarmers will fork out $1.79 in fully-franked dividends per share in FY2023, rising to $1.92 per share for FY2024. That latter dividend projection, if accurate, would see Wesfarmers shares with a dividend yield of close to 4% at the current share price.

So it's clear that Morgans does think that June would be a great month to pick up some Wesfarmers shares for your ASX portfolio. But let's see what the first month of winter has in store for this ASX 200 blue chip.

At the current Wesfarmers share price, the company has a market capitalisation of $54.66 billion, with a trailing dividend yield of 3.9%.

 

Motley Fool contributor Sebastian Bowen has positions in Wesfamers. 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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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