Wesfarmers Ltd (ASX: WES) shares have climbed further into the green in Wednesday morning trade.
The shares are up around 1% for the day, to $80.63 at the time of writing.
The increase means the conglomerate's shares have now rebounded around 12% from its latest low of $72.29 recorded in mid-September.
They're still down around 1% for the year-to-date and are trading around 11% below levels seen this time last year.
It's been a volatile ride for Wesfarmers shares in 2026. The shares have suffered two significant crashes, one in February after the company posted its first-half FY26 results, and again in mid-August when it posted its full-year FY26 update.
The latest full-year update two months ago was good on the surface and the conglomerate saw strong performance across its major Bunnings and Kmart divisions. These included a 3.4% increase in revenue, to $47.3 million, and a 7.3% increase in EBIT. But statutory NPAT fell 1.8% to $2.8 million including significant items, or was up 8.3% excluding them.
Wesfarmers' result came in slightly ahead of the market's $47.1 billion forecasts for revenue, and was in line with expectations for NPAT.
What spooked investors is that management flagged concerns about increasing operating costs, labor cost pressures and softer reading momentum heading into FY27.
Wesfarmers expected higher capital expenditure of $1.3 to $1.5 billion for FY27, particularly to support lithium production, store refurbishments, supply chain upgrades, and the start of a new joint venture in modular residential construction.
Image source: Getty Images
What has caused the latest rebound?
There isn't any specific price sensitive news out of the company to explain why its shares have been rebounding since mid-September.
It's most likely that after a huge 20% crash during the six weeks from early-August to mid-September saw investors shift their view on the share price value. It's likely that savvy investors realised the stock had become oversold and was trading well below fair value.
Retail shares have also benefitted from a boost in confidence following the latest softer-than-expected Australian employment data. This has eased fears about a further interest rate hike, and eased pressure on household budgets, which is great news for retail businesses like Wesfarmers.
Can the Wesfarmers shares keep climbing higher?
Sentiment is still very mixed on the outlook for the conglomerate over the next 12 months.
Market Index data shows the majority of brokers have a sell rating. The $75.58 average target price implies around a 6% downside over the next 12 months.
TradingView data presents slightly more positive forecasts. Half of the 16 analysts have a strong sell rating on Wesfarmers shares. But another three rate the stock as a hold and five more have a buy/strong buy rating.
The average target price is a little higher, at $76.59, but that still implies a downside of around 5% at the time of writing.
But the gap between the maximum and minimum target prices is huge. Some expect the shares to drop another 19% to just $65 over the next 12 months. Others think Wesfarmers shares have the potential to jump 10% higher to $89 each, at the time of writing.
