Wesfarmers Ltd (ASX: WES) shares have climbed into the green again in Wednesday's trade.
At the time of writing, the Australian conglomerate's share price is up around 3% and trading at $82.04 per share.
Today's price increase follows a run of gains over the past three weeks. Since bottoming at a 52-week low in mid-May, Wesfarmers shares have rebounded over 15%.
Now the question is, can they keep going?
Image source: Getty Images
What happened to Wesfarmers shares this year?
Global volatility, concerns about inflation, and the rising cost of living smashed the retail giant's shares in early 2026.
Wesfarmers reported a solid half-year profit earlier this year, with NPAT up 9.3%, but investors focused on weaker-than-expected trading in the early weeks of the second half. On paper, the result looked good, but investors weren't impressed, and many quickly sold up their shares.
The downturn was exacerbated by an overall shift in the market from retail-heavy stocks, such as Wesfarmers, to energy assets during periods of peak volatility.
After initially climbing around 9% through the first six weeks of the year, Wesfarmers shares crashed over 20% to a low in mid-May.
But it looked like investors then concluded the Wesfarmer share sell-off had become excessive.
Why did sentiment turn?
Over the past month, markets have become more optimistic about the potential for future interest rate cuts, and investors have started buying back shares in high-quality stocks in the dip.
A couple of good-news announcements also helped rally investors.
Earlier this month, Wesfarmers announced a major business restructuring, stating that the Industrial and Safety businesses, Blackwoods and Workwear Group, will transition into Wesfarmers-owned Bunnings Group on the 1st of July.
Wesfarmers shares are pushing higher again today after the company posted its 2026 Strategy Briefing Day presentation. The company said it is accelerating its growth and productivity agenda, has a portfolio of high-quality businesses with a mix of growth and resilience, and retains a strong balance sheet with the flexibility to invest.
Can the conglomerate's shares keep climbing higher in 2026?
It looks unlikely.
In fact, it seems that analysts now consider Wesfarmers shares to be trading above fair value, with many tipping a downside ahead.
Market Index data shows the majority of brokers rate Wesfarmers shares as a hold. The $78.05 target price implies a potential downside of around 2.5% at the time of writing.
TradingView data also shows that the majority (seven out of 12 have a hold rating on the stock). However, the average target price of $74.36 implies Wesfarmers shares could drop around 10% from the current trading price.
John Athanasiou from Red Leaf Securities has a hold rating on Wesfarmers shares. He said that while Wesfarmers is able to generate steady returns across cycles, near-term growth is likely to remain subdued.
Meanwhile, Philippe Bui from Medallion Financial Group is a little more bearish. He put a sell rating on this ASX 200 consumer discretionary share earlier this month. The broker said that while Wesfarmers is a high-quality business, the outlook is softening.
