Wesfarmers Ltd (ASX: WES) shares have had a strong run over the past 12 months. At the time of writing, the share price is up 31.14% for the year and trading at $92.60 a piece. The current share price is just shy of the all-time high of $94.76 recorded in late August.
The stock has far outpaced the S&P/ASX 200 Index (ASX: XJO). For context, the index is trading 4.39% higher than this time last year.
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Why are Wesfarmers shares still climbing?
Wesfarmers reported some solid full-year FY 2025 results last month, on 28 August. The company reported an increase in revenue, earnings before interest and tax (EBIT), and underlying EBIT. Wesfarmers' share price spiked following the results announcement.
In late-August, the company also recommended a $1.7 billion capital return, subject to shareholder approval at the 2025 Annual General Meeting on 30 October. It includes payment of a fully-franked special dividend.
The news appeared to boost investor confidence and made the stock more attractive for income-focused investors.
How many shares do I need for a passive income?
Wesfarmers has long been considered a great ASX dividend share which has the potential to grow. As owner of Bunnings, Kmart, Officeworks, Priceline, and many more, Wesfarmers is responsible for paying some of the biggest dividend payouts in Australia.
In its FY25 announcement, Wesfarmers' board of directors revealed it had decided on a fully franked FY25 final dividend of $1.11 per share, bringing the full-year dividend to $2.06 per share.
According to the broker UBS, Wesfarmers is predicted to pay an annual dividend per share of $2.11 in FY26. This translates into a dividend yield of 2.4%, not including franking credits.
Meanwhile, Commsec forecasts that Wesfarmers could pay an annual dividend per share of $2.10 in FY26. This translates into a dividend yield of 2.4%, excluding franking credits.
This means an investor would need to buy around 450 shares to aim for $1,000 in annual dividends. That would cost around $41,666 today!
What do analysts think of the stock?
Wesfarmers shares have continued flying higher through the year, and while this looks attractive on the surface, some investors think the stock has now peaked and is slightly overvalued.
Morgans analysts think the shares are slightly overvalued at current levels and recently lowered its price target to $83.20 per share.
Christopher Watt from Bell Potter Securities has a sell rating and a $73.10 target price on Wesfarmers shares.
