Wesfarmers Ltd (ASX: WES) shares are slipping today.
Shares in the diversified S&P/ASX 200 Index (ASX: XJO) conglomerate – whose retail subsidiaries include Bunnings Warehouse, Kmart Australia, Officeworks, and Priceline – closed yesterday trading for $91.79. During the Tuesday lunch hour, shares are changing hands for $91.47 apiece, down 0.4%.
For some context, the ASX 200 is down 0.7% at this same time.
Despite today's retrace, Wesfarmers shares remain up an impressive 31.7% since this time last year. That's well ahead of the 10.0% gains delivered by the benchmark index over this same period.
Atop the outperforming share price, Wesfarmers also paid (or shortly will pay) two fully franked dividends over the year totalling $2.06 a share. The stock currently trades at a fully franked 2.3% dividend yield.
As you may know, Wesfarmers reported on its full-year FY 2025 earnings results on 28 August. With profits and dividends growing, the stock closed up 0.4% on the day.
But following on the strong run of outperformance this past year, with Wesfarmers notching a new record closing high of $94.76 on 21 August, is the ASX 200 stock a buy, hold, or sell?
Below, we look at two very different analyst recommendations (both courtesy of The Bull).
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The sell case for the surging ASX 200 stock
"This industrial conglomerate posted revenue of $45.7 billion in full year 2025, up 3.4% on the prior corresponding period," said Bell Potter Securities' Christopher Watt, who has a sell recommendation on Wesfarmers shares.
"Net profit after tax, excluding significant items, of $2.653 billion was up 3.8%," he added.
But Watt expressed concerns over the company's stretched valuations following the strong share price gains.
According to Watt:
Despite owning strong brands, such as Bunnings and Kmart, the company was recently trading on a forward earnings multiple well in excess of its five-year average of about 26 times. Analyst consensus has turned cautious, with a target price of $73.10.
That consensus price target would imply a potential downside of 20% from the current Wesfarmers share price.
Watt concluded:
While the lithium refinery project is 95% complete, an earnings contribution isn't expected until fiscal year 2027.
The stock has enjoyed a stellar run, but, in our view, the earnings outlook doesn't justify the current valuation.
The buy case for Wesfarmers shares
Catapult Wealth's Dylan Evans has a more optimistic view on the outlook for the ASX 200 stock (from the Bull).
"The industrial conglomerate reported a good result for full year 2025," said Evans, who has a buy recommendation on Wesfarmers shares.
"Net profit after tax, excluding significant items, was up 3.8% on the prior corresponding period in what has been difficult conditions for the retail sector," he added.
But Evans forecasts improving market conditions ahead.
He said:
We expect the retail business, which makes up 85% of group earnings, to continue performing as conditions improve and shoppers benefit from expected easing in inflation and falling interest rates.
Evans also believes the company's chemical and healthcare segments can help boost Wesfarmers shares.
"Future upside can be found in the small, but growing chemical and healthcare divisions," he concluded.
