Wesfarmers Ltd (ASX: WES) shares are marching higher today.
Shares in the diversified S&P/ASX 200 Index (ASX: XJO) retailer – whose subsidiaries include household names like Bunnings Warehouse, Kmart Australia, Officeworks, and Priceline – closed yesterday trading at $72.97. In afternoon trade on Wednesday, shares are changing hands for $73.57 apiece, up 0.8%.
For some context, the ASX 200 is up 0.2% at this same time.
This outperformance is nothing new for Wesfarmers shares, with the ASX 200 stock up 3.0% in 2025, compared to the 3.2% year to date loss posted by the benchmark index.
The stock is up 8.6% over the past 12 months, racing ahead of the 0.7% gains delivered by the ASX 200 over this same time.
With those figures in mind, Medallion Financial Group's Philippe Bui believes Wesfarmers may be priced for more future growth than the company might deliver (courtesy of The Bull).
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Wesfarmers shares: Buy, sell, hold?
"The industrial conglomerate has come off its highs, but was recently trading on an elevated price/earnings ratio of about 31 times that's above long-term averages," said Bui, who has a sell recommendation on Wesfarmers shares.
"The stock seems priced for strong growth figures," he noted.
According to Bui:
Recent half year results in fiscal year 2025 were solid, but most metrics came in at low single digits. Although it's a defensive position, with a recent dividend yield below 3%, we see much more attractive options elsewhere.
Goldman Sachs has a different take on Wesfarmers shares.
The broker sounded a particularly positive note following Bunnings Strategy Day, which took place in Melbourne on 27 March.
"Bunnings highlighted a double-digit growth opportunity in its sales per square metre," Goldman noted.
"Bunnings plans to build entry into the new categories through range and value differentiation including securing lead brands … and own brands at entry prices," the broker added. "Bunnings has stepped up its services proposition including onsite specialists, online specialists help line, on site delivery and targeted loyalty offers."
Goldman Sachs has a buy rating on Wesfarmers shares with a $80.40 price target. That represents a potential upside of more than 9% from current levels, not including dividends.
What's the latest from the ASX 200 retail giant?
Wesfarmers reported its half-year results (H1 FY 2025) on 20 February.
Highlights included a 3.6% year-on-year increase in revenue to $23.49 billion.
And with net profit after tax up 2.9% to $1.47 billion, management increased the fully franked interim dividend by 4.4% to 95 cents a share.
Bunnings achieved a 3.1% increase in sales to $10.26 billion.
Wesfarmers shares closed up 1.3% on the day the company reported its results.
