Wesfarmers Ltd (ASX: WES) shares are pushing higher again on Monday.
At the time of writing, the Wesfarmers share price is up 1.41% to $90.96. Today's gain takes its rise in 2026 to around 12%.
The stock is also trading only about 4% below its 52-week high of $95.18.
There haven't been any new company announcements today. However, Macquarie has lifted its price target by 1.2% to $86.
While the increase is positive, the new target still sits below the current share price.
So, has the market pushed Wesfarmers shares too far?
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Why have Wesfarmers shares climbed?
The recent results help explain why the share price has kept climbing.
Wesfarmers reported a 3.1% increase in first-half revenue to $24.21 billion, while net profit rose 9.3% to $1.60 billion. The fully-franked interim dividend also increased 7.4% to $1.02 per share.
Bunnings remained the largest contributor, with earnings rising 5% to $1.39 billion. Kmart Group earnings increased 6.1% to $683 million.
Returns on capital (ROC) were around 70% at both businesses, which remains one of Wesfarmers' biggest strengths.
Nonetheless, Wesfarmers is still looking for more growth. Bunnings has expanded into categories including tools, workwear, rural products, and automotive accessories. Kmart has kept expanding its Anko range and opened more joint venture stores in the Philippines.
Management said in February that its retail businesses had continued trading well through the first 6 weeks of the second half.
Brokers remain cautious
The share price now sits well above most broker forecasts.
Macquarie's new $86 target is one of the higher recent estimates, but it still sits around 5.5% below the current share price.
Goldman Sachs and CLSA both have $78 targets, while Citi is more bearish with a $69 target.
Most analysts remain cautious. Investing.com currently shows an average 12-month price target of $76.36, around 16% below today's price, along with an overall sell consensus.
The valuation is another reason for the caution. Wesfarmers trades on a trailing price-to-earnings (P/E) ratio of 33.7 times and offers a dividend yield of about 2.8%.
What does the chart show?
Momentum remains strong, although the stock is nearing overbought territory.
Wesfarmers has a relative strength index (RSI) reading of 68, just below the level of 70 generally viewed as overbought.
The share price is also above the middle Bollinger Band at around $88.48. The 52-week high near $95.18 is the next resistance level, while the $88 to $90 area is the nearest support zone.
Wesfarmers is still producing solid earnings, but the share price now leaves less room for a weak result.
The full-year result on 27 August will show whether earnings are keeping pace with the share price.
