Wesfarmers Ltd (ASX: WES) shares have been a solid choice for growing wealth over the last several years. We're going to consider whether the company can deliver good returns from here.
Wesfarmers is best known as the owner of Bunnings Group (which includes Beaumont Tiles) and Kmart Group (which includes Anko and Target).
The company has several businesses in its portfolio, including chemicals, energy, a fertiliser business called WesCEF, and its healthcare segment, which includes Priceline and InstantScripts.
The company recently reported its FY26 result, which gave investors insights into its performance and helps figure out what the investment's underlying value.
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FY26 earnings recap
For the 12 months to 30 June 2026, the business reported revenue growth of 3.4% to $47.3 billion.
Overall, Bunnings Group revenue grew 4.1% to $20.4 billion, Kmart Group revenue rose 2.8% to $11.75 billion, WesCEF revenue increased 5.9% to $3.1 billion, Officeworks revenue rose 3.7% to $3.7 billion, and healthcare revenue grew 9.1% to $6.5 billion.
Turning to profitability, underlying operating profit (EBIT) rose 7.3% to $4.5 billion, and underlying net profit increased 8.3% to $2.87 billion.
In terms of divisional earnings, Bunnings Group earnings before tax (EBT) rose 5.1% to $2.45 billion, Kmart Group EBT climbed 6% to $1.1 billion, WesCEF EBT increased 18.5% to $473 million, Officeworks EBT declined 22.2% to $165 million and the Wesfarmers healthcare division EBT increased 18.8% to $76 million.
Given the challenging retail conditions, I think the company delivered an impressive performance.
Its trading update was promising, with commentary suggesting that sales growth has continued for Kmart and Bunnings in the first seven weeks of FY27.
Given its market-leading position in affordable hardware and general merchandise, I think the business is well positioned for the current economic climate.
What could happen with a $10,000 investment in Wesfarmers shares?
According to CMC Invest, there have been 11 analyst ratings on the company within the last three months.
Of those 11 expert ratings, the average price target is $78.13. A price target is where analysts think the (Wesfarmers) share price will go in 12 months from the time of the investment call.
The average price target of $78.13 implies the Wesfarmers share price could rise by 7.3% over the next year. Therefore, a $10,000 investment could grow to $10,700, which would be solid return, in my opinion.
On top of that, the business could pay an annual dividend per share of $2.40 in FY27, according to CMC Invest. That could translate into a grossed-up dividend yield of 4.7%, including franking credits.
Overall, investors in Wesfarmers could see a $10,000 investment turn into more than $11,000 of total wealth within the next 12 months. That could be a solid investment, but there could be even better ASX share buys available.
