Wesfarmers Ltd (ASX: WES) shares have long been a popular choice among passive income orientated investors.
However, global volatility, inflation concerns and anxiety about another interest rate increase have recently weighed on Wesfarmers shares recently.
After initially climbing 9% through the first few weeks of the year, Wesfarmers shares have shed nearly 20% of their value since mid-February.
The retail giant's shares are now more than 10% lower for the year to date.
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Wesfarmers shares are tumbling, but what about passive income from the retail giant?
It's clear Wesfarmers shares have come off the boil recently as Australians tighten their purse strings and prepare for ongoing instability.
But passive income from Wesfarmers dividend payments is still a compelling reason to buy into the stock.
Wesfarmers is a leading Australian blue-chip company. At the time of writing, the business is the 7th largest company listed on the ASX with a market cap of around $82 billion.
The company is well-established, and financially sound with a history of reliable growth and stability.
For example, for the first half of FY26, the conglomerate posted a 9.3% increase in NPAT, to $1.6 billion. And while the company acknowledges that inflation and higher operating expenses could remain as headwinds going forward, it is confident that earnings growth will continue.
It's this stability and consistent long-term net profit growth that means Wesfarmers is able to pay its shareholders a reliable and consistent passive income.
Wesfarmers traditionally makes two fully-franked dividend payments to shareholders per year payable in March and October.
In February, the Kmart and Bunnings owner declared a fully franked interim dividend of $1.02 per share, up 7.4%.
And as the company's earnings climb, its payout is expected to rise too.
Analysts tip the Wesfarmers to pay an annual $2.13 dividend per share for FY26, and then $2.31 in FY27.
That's a great passive income!
What do the experts think of the stock?
Analyst sentiment about Wesfarmers shares is relatively reserved.
Last week Red Leaf Securities' John Athanasiou said he sees headwinds building for Wesfarmers shares.
He said recent trading suggests slowing consumer demand and cost pressures are weighing on investor sentiment.
Shaw and Partners is a little more positive on the stock, although the broker said it thinks its share price is fully valued now and offers only limited upside.
TradingView data shows seven out of 12 analysts have a hold rating on Wesfarmers shares. Another seven have a sell or strong sell rating, and two analysts rate the stock a strong buy.
The average target price of $76.88 implies a potential 6% upside at the time of writing. Although analysts think the shares could move anywhere between $65 and $100 over the next 12 months. That implies a swing between a 9% downside and a 38% upside at the time of writing.
