S&P/ASX 200 Index (ASX: XJO) shares are higher on Tuesday at 8,599.7 points, up 0.4%.
Over the year, ASX 200 consumer discretionary shares have underperformed the broader market.
The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has risen 3.68% versus 4.69% for the benchmark index.
Let's take a look at the latest ratings and 12-month price targets on the three largest ASX 200 consumer discretionary stocks.
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ASX 200 consumer discretionary shares: Buy, hold, or sell?
Here's what the analysts at Morgans think of these sector leaders.
1. Wesfarmers Ltd (ASX: WES)
Wesfarmers is the largest ASX 200 consumer discretionary share with a market capitalisation of $93 billion.
The Wesfarmers share price is $81.51, down 0.6% on Tuesday and up 14% in the year to date.
In a recent trading update, Wesfarmers said consumers remained cautious amid higher prices and paused interest rate cuts.
The company noted good sales momentum for Bunnings, Kmart Group, and Officeworks but flagged that 1H FY26 earnings for Officeworks will be impacted by lower operating margins and restructuring costs.
Morgans said:
WES is also experiencing pressure across its divisions in relation to supply chain, labour, energy, and regulatory costs. On the back of the trading update, we decrease FY26-28F group EBIT by 1%, largely due to downgrades to Officeworks earnings forecasts.
While we continue to view WES as a core long-term portfolio holding with a diversified group of well-known retail and industrial brands, a healthy balance sheet, and an experienced leadership team with a strong track record of growth, trading on 35x FY26F PE we see the stock as overvalued in the short term.
The broker maintained a trim rating on Wesfarmers and cut its share price target from $83.20 to $79.30.
2. Aristocrat Leisure Ltd (ASX: ALL)
Aristocrat is the second-largest ASX 200 consumer discretionary share with a market cap of $36 billion.
The Aristocrat share price is $57.99, down 0.7% today and down 16% for 2025.
Aristocrat released its FY25 results last month. The company reported an 11% increase in revenue to $6,297 million.
Morgans commented:
Headline numbers were broadly in line with both our and market expectations, though a few soft spots emerged beneath the surface.
Interactive (online casino-style games) was weaker than expected and punished, given it's a smaller, faster growing segment, core to longer-term growth plans. Gaming Operations in North America (NA) were also soft, with only 4.1k net adds and lower-than-expected fee-per-day metrics weighing on performance.
Encouragingly, management expects the business to return to its normalised growth range moving forward.
Morgans raised its rating on Aristocrat shares from accumulate to buy but reduced its 12-month price target from $77 to $73.
3. Light & Wonder Inc. CDI (ASX: LNW)
Light & Wonder is the third-largest ASX 200 consumer discretionary share with a market cap of $12 billion.
The Light & Wonder share price is $150.49, down 1.5% on Tuesday and up 8% in the year to date.
Morgans said Light & Wonder delivered a strong 3Q FY25 result that alleviated market concerns about FY25 guidance delivery.
The broker said:
LNW delivered record margin expansion across all three segments, with iGaming operating leverage the standout performer, while land-based margins surprised on favourable product mix as Grover scales and premium installed base momentum continues.
Morgans has a buy rating on Light & Wonder shares with a price target of $175.
