With February reporting season approaching, many investors are asking the same question. Is it worth buying Wesfarmers Ltd (ASX: WES) shares before the company reports or should you wait?
At a current share price of $80.91, Wesfarmers is trading 15% below its 52-week high of $95.18.
That pullback has reopened the debate, particularly given the company's reputation for quality and long-term execution. While buying any stock ahead of earnings carries risk, I think there is a reasonable case for considering Wesfarmers before February.
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A high-quality ASX stock after a pullback
Wesfarmers is not a cheap stock on traditional valuation metrics. It rarely is. What investors are paying for is the quality of the portfolio, the resilience of earnings, and management's long track record of disciplined capital allocation.
Consensus estimates from CommSec point to earnings per share of $2.52 in FY26, rising to $2.75 in FY27. That is not explosive growth, but it reflects steady progress from a diversified group that includes Bunnings, Kmart Group, Officeworks, WesCEF, and Wesfarmers Health.
The recent share price weakness does not appear to reflect a fundamental breakdown in the business. Instead, I think it looks more like a reset in expectations after a very strong run.
Dividends remain a key part of the appeal
For long-term investors, dividends matter. Wesfarmers has a strong history here, and current expectations remain supportive.
According to CommSec, fully franked dividends of $2.14 per share are expected in FY26, rising to $2.33 in FY27. At today's share price, that represents an attractive income stream backed by cash-generative businesses and a strong balance sheet.
While dividends are never guaranteed, I think Wesfarmers' focus on capital discipline and shareholder returns suggests income remains a priority.
What reporting season could bring for Wesfarmers shares
Buying before reporting season always comes with uncertainty. Short-term market reactions can be unpredictable, even when results are solid.
That said, commentary from the 2025 annual general meeting (AGM) pointed to resilient trading conditions, ongoing investment in productivity, and a diversified portfolio that helps offset weakness in individual divisions.
But if the results were to disappoint, I believe the downside risk from here may be more limited than it was at higher price levels.
Why I lean towards buying before February
For me, the decision comes down to time horizon.
If you are a short-term trader trying to guess the market's reaction to earnings, waiting may make sense. But if you are a long-term investor looking to own a high-quality ASX 200 stock through multiple cycles, I think the current setup is reasonable.
Wesfarmers shares are not cheap, but I believe they represent value relative to the quality, stability, and long-term earnings power of the business. I would rather lock up a purchase at this price than waiting and risk them rising back towards their 52-week high.
Foolish takeaway
Buying Wesfarmers shares before February is not without risk. Earnings season always carries uncertainty. However, after a meaningful pullback, supported by solid earnings expectations and attractive fully franked dividends, I think the risk-reward balance looks acceptable for long-term investors.
