Wesfarmers Ltd (ASX: WES) is a staple blue-chip stock in many Australian investors' portfolios, and it's not hard to see why.
The company has a strong stable of retail brands across its Bunnings, Kmart, and Officeworks operations and is also diversified into lithium mining through its Western Australian Mt Holland operations.
While the shares are broadly flat over the past year, according to CMC Markets data, Wesfarmers has returned a compound 22.7% over three years and 11.4% over five.
So are the shares good value at the moment?
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AI the focus of strategy day
Wesfarmers, earlier this week, held a strategy briefing day where it laid out its plans for the future.
One of the key messages that came out of the day, and which would be implemented across the business, was the use of artificial intelligence (AI) to help team members do their jobs, increase the effectiveness of marketing, and improve supply chain operations.
Within Bunnings, the company said it could use AI to help people plan and carry out do-it-yourself projects, while online, it would enable customers to find and buy products more easily.
The company will also be bolstering its in-store media offerings, growing the network to more than 560 in-store screens across more than 250 stores.
Within the Kmart division, the company now has 16 stores trading in its new Kmart Plan C+ format and expects to grow that number to 40 by the end of FY27.
Wesfarmers shares looking fully-priced
Regarding how the strategy briefing was received by analysts, all three I surveyed issued a neutral recommendation on the stock following the strategy day.
The team at Jarden said it was a steady-as-she-goes message.
They added:
WES's Strategy Day provided a consistent, clear message with no trading updates and a strategic agenda that was iterative vs. a step-change. The overall tone was one of optimism and readiness to be a leader across digital, AI and data, as opposed to its historical position as a fast-follower (i.e. online). We came away more positive, but are cutting FY27 EPS c3%, while raising FY28+ modestly.
Jarden has a neutral rating on the stock with a 12-month price target of $79.30.
Macquarie has a more bullish price target of $85 on Wesfarmers shares, but also has a neutral rating, saying there were no near-term catalysts that would see the stock break out.
UBS, meanwhile, has an $84 price target on Wesfarmers, upgrading that from $81 on the company's increasing confidence in the retail growth outlook.
Wesfarmers shares are currently changing hands for $83.35. The company is valued at $94.7 billion.
