Let's start the new week with some fresh ratings on three ASX 200 shares.

BHP Group Ltd (ASX: BHP)

BHP shares finished last week at $62.93 apiece, up 38% YTD. 

Elio D'Amato from EnviroInvest has a hold rating on this ASX 200 mining share. 

D'Amato said (courtesy The Bull): 

This diversified miner produces iron ore, copper and other commodities critical to global economic growth. It remains a core holding in many portfolios due to its scale, balance sheet strength and ability to generate significant cash flow through commodity cycles.

However, in my view, recent news reports highlighting delays to decarbonisation initiatives and a reduced emphasis on environmental objectives are disappointing.

Copper and potash projects still provide exposure to the energy transition, but the environmental investment case is less compelling than it was several years ago.

Nine Entertainment Co Holdings Ltd (ASX: NEC)

The Nine Entertainment share price closed at 91 cents on Friday, down 18% YTD.

Andrew Wielandt from DP Wealth Advisory has a sell rating on this ASX 200 communications share. 

Wielandt commented: 

This TV, newspaper publishing and streaming company has restructured its asset portfolio. It completed the sale of Nine Radio on April 30 and acquired QMS Media on March 31.

The prospect of higher interest rates in a slowing economy present challenges, making it difficult to identify sufficient catalysts for meaningful growth.

In our view, there remains a structural shift away from free-to-air television towards streaming services and video on demand, but this in only partially addressed through NEC's 9Now and Stan platforms in a fiercely competitive environment.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price closed at $86.47 on Friday, up 5.8% YTD.

Andrew Wielandt from DP Wealth Advisory has a hold rating on this ASX 200 consumer discretionary share. 

Wielandt said: 

The company's operations span across a diversified industrial portfolio, including retail, fertilisers, chemicals and more recently healthcare. However, the market is cautious about a slowing domestic economy under pressure from rising interest rates.

A proposed change in taxation treatment for capital gains may slow the property market.

Wesfarmers is one of the biggest employers in Australia, so a minimum 4.75 per cent wage increase for employees from July 1, 2026 may also weigh on the minds of investors.

The post Buy, hold, sell: Nine Entertainment, Wesfarmers, BHP shares appeared first on The Motley Fool Australia.

After all, Warren Buffett spent more than 60 years navigating crashes, recessions, and market volatility to become one of the richest people in the world. 

His investing wisdom boils down a few key philosophies: rational decision-making, patience to hold stock long-term, and picking high-quality businesses.

With that in mind, there are three ASX stocks which I think look like they align with Warren Buffett's investment strategy.

Transburban Group Ltd (ASX: TCL)

One of the key qualities that Warren Buffett looks for when making an investment is a competitive advantage that protects the company's long-term market share and profitability.

A great example of this is global infrastructure business Transurban. The company builds and operates major urban toll road networks, tunnels, and bridges and operates 22 assets across Australia, the US, and Canada.

Transurban benefits from a defensive quality because its services are essential. Even in the event of a downturn, people still need to travel to work or transport goods and services. Transurban's toll roads typically have stable traffic volumes year-round, which means the business enjoys resilient cash flow regardless of economic conditions. 

Another bonus is that most of its toll roads are on an annual contract. This means Transurban is able to increase its toll prices each year in line with rising inflation. 

Wesfarmers Ltd (ASX: WES)

Warren Buffett famously prefers businesses with a strong history, trusted management, reliable long-term profit growth. 

Wesfarmers embodies all three of these things. The company is well-established and financially sound with a history of reliable growth and stability. 

It also owns major brands across several different industries, including Kmart, Bunnings and Priceline and continually focuses on expanding its markets, product categories and digital capabilities to drive long-term growth. 

It's this stability and consistent long-term net profit growth that make Wesfarmers stand out amongst other ASX blue-chip stocks.  

Xero Ltd (ASX: XRO)

Xero doesn't offer the long-standing history or defensive nature of Wesfarmers or Transurban, but I think its sticky business model and recurring subscription revenue is something Warren Buffett would approve of.

The nature of the business means its customers are likely to keep paying for its services and products over a long time. And that translates to a reliable long-term revenue stream.

At the same time, the ASX tech stock still has a relatively small market position, suggesting there is potential to unlock significant growth. 

The company is actively expanding its product suites, such as payroll and workflow automation, and also its global presence in the UK and the US.

The post 3 ASX stocks that look like classic Warren Buffett investments appeared first on The Motley Fool Australia.

Consumer staples shares weren't far behind, surging 7.62%.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) rose 2.07% to 8,804 points by Friday's close.

Experts are now predicting an eventual cut for interest rates due to crumbling consumer confidence and low GDP growth.

Consumer sentiment fell in May to one of its weakest levels ever in the 50-year history of the benchmark monthly survey.

Softer-than-expected inflation also enhances the case for rates to be kept on hold or cut at some point.

Annual headline inflation fell to 4.2% in April, down from 4.6% in March, according to Bureau of Statistics figures.

On Friday, the ASX 200 rallied 1.98% after US President Donald Trump said a peace deal with Iran could be reached this weekend.

This would likely lead to the reopening of the Strait of Hormuz, a vital shipping route that carries 20% of the world's oil and gas.

The ongoing oil shock has contributed to resurgent inflation and three interest rate increases in Australia this year.

The Reserve Bank will announce the next interest rate decision on Tuesday.

It may seem counterintuitive that signs of economic weakness boosted ASX 200 retail shares last week.

But remember, share markets tend to look six to 12 months into the future.

Thus, economic weakness today is pushing retail stocks up as investors anticipate a greater likelihood of interest rate cuts.

Let's see how some individual retail stocks performed last week.

Consumer discretionary shares led the ASX sectors last week

The Wesfarmers Ltd (ASX: WES) share price leapt 9.55% over the short trading week to finish at $86.47.

Shares in gaming technology company Aristocrat Leisure Ltd (ASX: ALL) rose 5.07% to $53.91.

The Lottery Corporation Ltd (ASX: TLC) share price soared 8.81% to $5.68.

The Light & Wonder Inc (ASX: LNW) share price ripped 9.8% higher to $127.26.

JB Hi-Fi Ltd (ASX: JBH) shares ascended 7.6% to finish the week at $77.24.

The Harvey Norman Holdings Ltd (ASX: HVN) share price increased 7.88% to $4.79.

Temple & Webster Group Ltd (ASX: TPW) shares soared 13.09% to $5.27.

The Nick Scali Limited (ASX: NCK) share price rocketed 11.71% to $15.46.

Eagers Automotive Ltd (ASX: APE) shares rose 7.06% to $22.29.

The Super Retail Group Ltd (ASX: SUL) share price lifted 8.39% to $12.27.

Lovisa Holdings Ltd (ASX: LOV) shares surged 8.66% to $22.20 apiece.

ASX 200 travel share Flight Centre Travel Group Ltd (ASX: FLT) edged 0.36% higher to $11.07.

The Guzman Y Gomez Ltd (ASX: GYG) share price lifted 3.63% to $19.40.

ASX 200 market sector snapshot

Here's how the 11 market sectors stacked up last week, according to CommSec data.

Over the shortened trading week:

The post Why did ASX 200 retail shares outperform last week? appeared first on The Motley Fool Australia.

There is no large lump sum to put to work and no portfolio quietly compounding in the background.

But that also means the plan can be built properly from day one.

The goal is not to get rich quickly. It is to buy quality ASX shares consistently, give them enough time to compound, and avoid the mistakes that can break the process.

Buy quality businesses

The first step is deciding what kind of ASX shares deserve a place in the portfolio.

For a $1 million target, I would not build around speculative small caps or companies that need everything to go right. I would focus on businesses with sustainable earnings, strong management teams, and the ability to reinvest for growth over many years.

That could include names such as Goodman Group (ASX: GMG), which has exposure to logistics, industrial property, and data centres. Or Macquarie Group Ltd (ASX: MQG), which has a long record of finding opportunities across global markets.

TechnologyOne Ltd (ASX: TNE) is another example of the type of business that can compound over time, thanks to recurring software revenue and a strong position in enterprise software.

The common thread is quality. A long-term portfolio needs companies that can survive difficult markets and still be stronger years later.

Make the monthly investment non-negotiable

The next step is consistency. Investing $1,000 a month works best when it becomes part of the household budget, rather than a decision that has to be made from scratch each time.

That removes a lot of emotion from the process. The market will never feel perfectly safe. There will always be headlines about interest rates, recessions, valuations, elections, or global risks.

But regular investing helps cut through that noise. Some months, the money will buy ASX shares at higher prices. Other months, it will buy them after a pullback. Over time, that steady approach can help investors build positions in quality companies without trying to predict every market move.

This is where dependable compounders can help. A business such as Wesfarmers Ltd (ASX: WES) has shown how a strong retail and industrial portfolio can create long-term value. Woolworths Group Ltd (ASX: WOW) offers a different type of strength, with defensive demand from supermarkets and everyday household spending.

Not every holding needs to be exciting. Some just need to keep producing earnings, paying dividends, and growing steadily.

Time and compounding

Let's assume that an investor starts with nothing, invests $1,000 a month, and achieves an average annual return of 10%.

That return is not guaranteed, but is roughly in line with long-term averages, so is achievable.

At that rate, the portfolio would grow to approximately $1 million in around 23 years.

That is the part many people underestimate. The early years can feel slow because most of the portfolio is built from savings. Later, the balance can start moving more from investment returns than fresh contributions.

That is when compounding becomes obvious.

Foolish takeaway

Building a $1 million ASX share portfolio from zero is not about one perfect stock pick. It is about repeated monthly investing, quality businesses, reinvested returns, and enough patience to let the maths work.

Done well, small beginnings can become serious wealth.

The post How to build a $1 million ASX share portfolio from zero appeared first on The Motley Fool Australia.

Let's check out what these experts think of three ASX shares in the retail and healthcare sectors.

Nick Scali Ltd (ASX: NCK)

The Nick Scali share price closed at $15.05, down 1.1% yesterday and down 36% in the calendar year to date (YTD). 

Morgans commenced coverage on this ASX 200 retail share with a buy rating this week.

The broker said it was looking through weak near-term consumer sentiment, and that the current share price is attractive.

Morgans described Nick Scali as a "high-quality retailer with a long track record".

In a new note, the broker explained its buy recommendation:

Nick Scali has delivered long-term EPS growth through disciplined store rollout, LFL growth, best-in-class margins, and operating leverage. Strong cash generation and balance sheet.

Structural negative working capital supports high cash conversion, while the low capital intensity of new store rollouts leaves ample cash flow for dividends and property purchases and/or growth ventures.

Store rollout optionality. Further Plush and Nick Scali rollout in ANZ and the Nick Scali rollout opportunity in the UK provide an attractive growth leg.

Morgans has a 12-month target of $17.84, which suggests almost 20% upside ahead.

Nyrada Inc (ASX: NYR)

The Nyrada share price finished at 45 cents, down 8.2% yesterday and down 62% YTD. 

Nyrada is a biotech developing novel therapies for cardiovascular, neurological, and cancer-related diseases.

On The Bull this week, Tony Locantro from Alto Capital put a hold rating on this ASX biotech share.

Locantro commented: 

Recent announcements highlighted progress in the Phase IIa PROTECT-MI trial for its lead drug candidate Xolatryp, along with encouraging pre-clinical oncology data and additional patent protection.

These developments continue to strengthen confidence in the broader platform and its commercial potential.

However, the company remains at a clinical development stage, with key efficacy and regulatory milestones still ahead. While the long term opportunity remains attractive, the current risk profile supports a hold recommendation pending further clinical validation.

Wesfarmers Ltd (ASX: WES) 

The Wesfarmers share price closed at $84.31 on Thursday, up 1.1% for the day and up 3% YTD. 

Wesfarmers held its 2026 Strategy Briefing Day on Wednesday.

The diversified conglomerate highlighted its growth and productivity plans, its portfolio of high-quality businesses, and its strong balance sheet, which provides the potential to invest.

Managing Director Rob Scott said Wesfarmers' primary objective remained satisfactory returns for shareholders.

Scott pointed out that Wesfarmers shares had delivered an average annual return of 15.8% over 10 years.

This compares to a 9.2% average annual return from the All Ordinaries Accumulation Index.

After the event, Citi reiterated its sell call on the ASX 200's biggest consumer discretionary share.

The broker has a price target of $69 on Wesfarmers shares.

This indicates a potential near-20% downside ahead.

The post Buy, hold, sell: Nick Scali, Nyrada, Wesfarmers shares appeared first on The Motley Fool Australia.

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?

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.

The post Are Wesfarmers shares a buy, sell or hold after this week's update? appeared first on The Motley Fool Australia.

The Wesfarmers shares that I purchased years ago have done very well for me, delivering both healthy capital growth and a treasured source of passive dividend income.

Wesfarmers brings many benefits to my portfolio. For one, it is an inherently diversified business. Most investors know Wesfarmers for its retail crown jewels – Kmart, OfficeWorks, Target, and last but not least, Bunnings. But Wesfarmers is much more than these four names. It also owns the Priceline pharmacy chain, chemicals and fertiliser manufacturing businesses, industrial safety operations, and many more facets.

For another, those crown jewel retailers are some of the most successful businesses in the country. Most of us are familiar with the Bunnings success story. But Wesfarmers has also managed Kmart, OfficeWorks and Target with aplomb. Kmart's success with its Anko brand is a notable achievement for Wesfarmers in recent years.

Wesfarmers has proven itself to be an astute manager of capital over many decades. It has delivered for shareholders, in both the growth and income arenas.

Yet, I haven't added to my Wesfarmers position for a very long time. I have no plans on doing so.

Why?

Well, it all comes down to price and value. As Warren Buffett once famously said, "price is what you pay, value is what you get".

Wesfarmers shares: Price and value

At the current Wesfarmers share price, I simply don't see much value.

At the present price of $82.22, you are buying a company worth about $93.3 billion, trading on an earnings multiple of 30.45.

For this, you are getting a company that generated $45.7 billion in revenue over FY2025 and an underlying net profit after tax of $2.65 billion. That latter metric represented a 3.8% rise over what Wesfarmers rang up over FY2024.

This all looks pretty expensive. To illustrate, companies that are growing at far faster rates than Wesfarmers are currently trading at far lower prices. Google-owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) and Facebook-owner Meta Platforms Inc (NASDAQ: META) grew profits by a lot more than 3.8% over their most recent financial years. And both currently ask well under an earnings multiple of 30.45. As of recent pricing, Alphabet is at 27.8, while Meta is at 21.2.

Of course, that is not an overly useful comparison, as Wesfarmers is a metaphorical apple and US tech titans are oranges. But, to labour the point, I think this shows just how pricey Wesfarmers shares are at their current ask.

One only has to look at CSL Ltd (ASX: CSL) and Commonwealth Bank of Australia (ASX: CBA) shares to see what happens when valuations get stretched. This is another apples-to-oranges comparison, but again, I think it is an apt point to highlight.

So, long story short, I won't be buying any more Wesfarmers shares at the current valuation. I would love to increase my exposure to this stellar ASX blue-chip stock. But at the current price we are being asked to pay, I don't see much value we might get.

The post I love Wesfarmers shares. Here's why I'm not buying more appeared first on The Motley Fool Australia.

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?

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. 

The post How high could Wesfarmers shares go? appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are climbing:

Develop Global Ltd (ASX: DVP)

The Develop Global share price is up 1.5% to $6.50. This morning, this mining and mining services company announced that it will develop the Sulphur Springs and Pioneer Dome projects after making final investment decisions. The company's managing director, Bill Beament, commented: "These are pivotal developments which set up our company for rapid growth. They unlock the huge value of these two projects, putting us on track to generate significant cashflows from three operations covering copper, zinc, silver and lithium and all in Australia."

IDP Education Ltd (ASX: IEL)

The IDP Education share price is up 4% to $2.19. This may have been driven by a broker note out of Morgans this week. It upgraded the language testing and student placement company's shares to a buy rating with a $3.15 price target. It said: "Visa data in IDP's key destination markets remains in deep contraction, with AUS, CAD, and the UK all experiencing material volume and visa grant rate declines. Positively, IDP's China IELTS is scaling quickly (13 test centres vs 5 at 1H26), the cost base reset is on track (A$25m net reduction), and the group continues to demonstrate pricing power across both IELTS and Student Placement (SP). With structural demand drivers for international study intact, a leaner cost base, growing China optionality and ongoing technology/product development (Navi, FastLane, One Skill Retake), we are willing to look through the near-term backdrop on a cyclically depressed multiple. We upgrade to BUY, A$3.15ps PT."

JB Hi-Fi Ltd (ASX: JBH)

The JB Hi-Fi share price is up over 3.5% to $76.16. This is despite there being no news out of the retail giant. However, it is worth noting that investors have been buying retail shares on Wednesday. This could possibly be due to optimism that interest rate hikes are over in Australia and the RBA's next move will be to lower them.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price is up 2.5% to $82.05. Investors appear to have responded positively to the company's 2026 Strategy Briefing Day event. At the event, Wesfarmers highlighted three key messages. It is accelerating its growth and productivity agenda, it has a portfolio of high-quality businesses with a mix of growth and resilience, and it retains a strong balance sheet with flexibility to invest.

The post Why Develop Global, IDP Education, JB Hi-Fi, and Wesfarmers shares are pushing higher today appeared first on The Motley Fool Australia.

In morning trade, the Bunnings and Kmart owner's shares are up 2.5% to $82.00.

Why are Wesfarmers shares rising?

This morning, Wesfarmers released its 2026 Strategy Briefing Day presentation.

Investors appear to be taking a positive view of the company's growth plans across its portfolio, particularly with the key Bunnings and Kmart brands.

Wesfarmers highlighted three key messages for the market. It is accelerating its growth and productivity agenda, it has a portfolio of high-quality businesses with a mix of growth and resilience, and it retains a strong balance sheet with flexibility to invest.

The company also pointed to its growing digital, data, and artificial intelligence capabilities as an important driver of future sales and earnings growth.

Bunnings remains the key growth engine

Bunnings was a major focus of the update.

Management said the business continues to be supported by strong foundations, including its lowest prices, widest range, and best experience strategy.

Bunnings is looking to grow by expanding its offer, improving its store network, accelerating commercial sales, and developing adjacent opportunities.

One area of focus is commercial customers. Bunnings is relaunching its commercial loyalty platform and improving its delivery, service channels, and digital tools for builders, trades, businesses, and organisations.

The company is also expanding in newer areas such as home electrification through Zelora, its home renewable energy offer.

Its marketplace is another growth opportunity. Bunnings now has around 300,000 marketplace products across more than 600 sellers and plans to launch the marketplace in New Zealand in the second quarter of FY 2027.

Artificial intelligence is also becoming a bigger part of the Bunnings strategy. The company said its AI-powered shopping tool, Buddy, is helping customers plan projects, find products, and complete purchases, while also driving higher basket sizes and conversion.

Kmart focusing on value and growth

Kmart Group was another key part of the presentation.

Management said customers remain focused on value and that Kmart is continuing to invest in its low-cost operating model.

The business has made more than 2,500 price drops in FY 2026 and is expanding strategic growth categories.

Kmart is also investing in store format innovation, with 16 stores now trading in the new Kmart Plan C+ format. This is expected to increase to 40 stores by the end of FY 2027.

Digital growth is another priority. Kmart has launched a third-party marketplace, is scaling agentic commerce, and continues to see strong engagement across its digital platforms.

The group also sees international growth potential from its Anko brand, with five Anko stores operating in the Philippines and another five planned by the end of FY 2027.

Other growth areas

Wesfarmers also provided updates on Officeworks, WesCEF, and Wesfarmers Health.

WesCEF's lithium project is progressing, with nameplate spodumene production achieved in FY 2026 and nameplate lithium hydroxide production targeted for the second half of calendar year 2027.

Wesfarmers Health is also progressing its multi-year transformation, with Priceline Pharmacy, digital health, loyalty, and wholesale efficiency key priorities. This includes the rollout of the atomica store brand, which stocks K-Beauty products like Medicube and appears inspired by Korean beauty retailer Olive Young.

Overall, today's update reinforces Wesfarmers' long-term strategy of investing in strong businesses, expanding addressable markets, and using technology to improve productivity.

With Bunnings and Kmart continuing to show growth opportunities, investors appear to be backing the company's strategy on Wednesday.

The post Why are Wesfarmers shares pushing higher today? appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 to edge higher

The Australian share market looks set for a better day on Wednesday despite a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% higher. In the United States, the Dow Jones rose 0.15%, but the S&P 500 fell 0.25% and the Nasdaq dropped 1%.

Oil prices tumble

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult session after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 3.2% to US$88.31 a barrel and the Brent crude oil price is down 2.85% to US$91.54 a barrel. This was driven by news that traffic is increasing in the Strait of Hormuz.

Wesfarmers update

All eyes will be on Wesfarmers Ltd (ASX: WES) shares on Wednesday when the conglomerate holds its strategy briefing day event in Sydney. Ahead of the event, Morgans recently upgraded the Bunnings owner's shares to an accumulate rating. It said: "In our view, WES remains a high-quality business with a healthy balance sheet and a proven management team. Amid ongoing geopolitical uncertainty and cost-of-living pressures, its retail divisions (Bunnings, Kmart Group, Officeworks, Priceline) are well-placed to grow due to their strong value propositions. A sustained improvement in lithium prices should also support earnings over the medium term."

Gold price drops

ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a poor session on Wednesday after the gold price dropped overnight. According to CNBC, the gold futures price is down 1.8% to US$4,282.9 an ounce. Traders were selling gold ahead of the release of US inflation data and on increasing rate hike bets.

TechnologyOne shares downgraded

Bell Potter is calling time on the TechnologyOne Ltd (ASX: TNE) share price rally. This morning, the broker has downgraded the enterprise software provider's shares to a hold rating (from buy) with an improved price target of $34.25 (from $32.25). It said: "Our updated TP of $34.25 is <15% premium to the share price so we downgrade our recommendation to HOLD. We now see the stock as reasonable value on FY26 and FY27 PE ratios of 66x and 55x respectively. We do see Technology One as one of if not the best quality large cap SaaS company on the ASX but we note it is already trading at almost double the FY26 and FY27 PE ratios of WiseTech (ASX: WTC) on 35x and 28x."

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

Ongoing geopolitical tensions, concerns about further interest rate hikes, stubbornly high inflation, and a tech-sector-wide sell-off have all weighed heavily on investor sentiment and raised anxiety about a potential sharemarket crash.

But as the Oracle of Omaha, Warren Buffett, once said, "Be fearful when others are greedy and greedy when others are fearful". In other words, a sharemarket crash might be the best time to buy ASX stocks.

Here are three ASX stocks I'd add to my portfolio in a sharemarket crash.

Xero Ltd (ASX: XRO)

Xero has reliable, sticky subscription revenue. The nature of its business means its customers are likely to keep paying for its services and products over a long time.

At the same time, the ASX tech stock still has a relatively small market position, suggesting there is potential to unlock significant growth. The company is actively expanding its product suites, such as payroll and workflow automation, and also its global presence in the UK and the US.

The company's latest FY26 result was impressive too. In mid-May, Xero reported a 31% increase in operating revenue, and its adjusted EBITDA is up 18%.

I see most technology shares as undervalued right now after the latest panic that AI could disrupt traditional software models. A further sharemarket crash could create an even greater opportunity for long-term investors to buy a high-quality stock primed for strong growth. 

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a different category than Xero. Rather than a high-growth ASX tech stock, Wesfarmers is a leading Australian blue-chip company. 

It's this stability and consistent long-term net profit growth that make the company a classic defensive stock. The retail conglomerate is able to provide investors with stability during an ASX sharemarket crash. 

Its stability also means it can pay shareholders a consistent passive income. For FY26, the ASX defensive stock is expected to pay a total dividend of $2.13 per unit, translating to a forward dividend yield of around 2.7% at the time of writing.

iShares S&P 500 ETF (ASX: IVV)

IVV is another excellent investment for long-term investors to make during a sharemarket crash.

Rather than investing in just one ASX stock, IVV gives its shareholders exposure to around 500 of the largest companies listed in the US, including global brands, businesses with large customer bases, and those with strong balance sheets. For example, the ETF holds major names such as Nvidia, Apple, and Amazon. 

The benefit of investing in an ETF rather than a single stock is that if one company suffers a share price decline, it would have a limited impact on the ETF as a whole. 

Buying IVV during a sharemarket crash is generally a lower-risk investment than trying to pick individual winners. Instead of betting on a single company, investors are effectively buying a slice of the largest US businesses at once.

The post 3 ASX stocks I'd buy during a sharemarket crash appeared first on The Motley Fool Australia.

Wesfarmers Ltd (ASX: WES), Xero Ltd (ASX: XRO), and Aristocrat Leisure Ltd (ASX: ALL) are all very different businesses, but I think each could be worth buying this month, and I'm not alone.

Analysts from Morgans have spoken positively about all three recently. 

Wesfarmers shares

Wesfarmers is not a stock I would usually expect to look obviously cheap.

The market recognises this is a high-quality business and often prices the company accordingly. But after a weaker period for the share price, I think the valuation looks more reasonable than it did a year ago.

Morgans notes that Wesfarmers shares have fallen 9% over the past 12 months and 7% over the past six months. The broker says the stock is now trading on 26.5 times forecast FY27 earnings, compared with a peak one-year forward P/E multiple of around 37 times in August 2025.

That is still a premium valuation, but I think it is more digestible for a business of this quality.

What appeals to me is Wesfarmers' ability to keep improving its businesses over time. This is not just about owning strong retail brands. It is about the group's culture of discipline, cost control, operational improvement, and reinvestment.

Morgans highlights Wesfarmers' healthy balance sheet, proven management team, and strong value propositions across its retail divisions. It also sees a possible medium-term earnings boost from better lithium prices.

The broker has recently upgraded the stock to accumulate and lifted its target price slightly to $81.10. I would go a step further and call Wesfarmers a buy for long-term investors.

Xero shares

Xero is another ASX 200 share I think looks attractive in June.

The small business software company recently delivered better-than-expected FY26 results and an FY27 outlook, according to Morgans. The broker also notes that earnings momentum continues to improve relative to consensus expectations.

I think the key attraction is that Xero is becoming more valuable to small businesses over time.

Accounting remains the foundation, but the opportunity is broader. Xero can help with invoicing, payments, payroll, tax, reporting, cash flow, and increasingly automated financial tasks.

The market has been nervous about artificial intelligence (AI) disruption. I understand that concern. AI could change how customers use software and what they are willing to pay for.

But I think Xero is better placed than many to turn AI into an advantage. If it can make its platform faster, simpler, and more useful for business owners, AI could deepen customer reliance rather than weaken it.

Morgans also points out that management was confident enough to announce a buyback and hint at potential capital management in FY28. The broker has retained its buy rating and $111 target price.

I agree with the positive view. Xero still has execution risk, particularly around the US and AI monetisation, but I think the long-term opportunity remains excellent.

Aristocrat Leisure shares

The third ASX 200 share I would buy in June is Aristocrat Leisure.

This is one of the ASX's best global growth businesses in my view.

Aristocrat has built a powerful position in gaming content, cabinets, digital gaming, and interactive entertainment. What I like most is that its success is not built on one product cycle alone. It has a deep content engine, a global customer base, and the balance sheet strength to invest through changing conditions.

Morgans was positive on the company's first-half result, noting that gaming was the clear standout. The broker highlighted strong outright sales, continued demand for the Baron cabinet, and solid leased additions.

There were weaker areas in Product Madness and Interactive, but Morgans still lifted its earnings per share forecasts and increased its target price to $67. It retained its buy rating.

I think financial strength is important because it gives Aristocrat the room to buy back shares, invest in content, pursue acquisitions, and continue strengthening the business.

Foolish Takeaway

What I like about this group is that the investment cases are not built on one narrow theme.

Each business has a different way to create value, and each has enough quality to remain interesting beyond June.

Morgans is positive on all three, and while I am slightly more bullish on Wesfarmers than the broker's accumulate rating, I think the broader message is clear: these are ASX 200 shares worth considering while valuations and sentiment still look reasonable.

The post Are Wesfarmers, Xero and this ASX 200 share buys in June? appeared first on The Motley Fool Australia.

That is a costly mistake.

30 June 2026 is less than four weeks away. That date is one of the most important financial deadlines of the year for anyone who wants to maximise their retirement savings.

Here's what you need to know before the clock runs out.

The concessional contributions cap

The concessional contributions cap for FY2026 is $30,000, including employer contributions.

Concessional contributions are taxed at 15% inside super, compared to marginal tax rates of up to 45% outside it.

For a person earning $100,000 with $12,500 in employer super already contributed, there is room for an additional $17,500 in salary sacrifice contributions before 30 June.

Making those contributions before 30 June saves thousands of dollars in income tax immediately.

Payday super starts 1 July

From 1 July 2026, the payday super rules take effect, requiring employers to pay superannuation at the same time as wages rather than quarterly.

That is good news for workers who have previously waited months for super contributions to arrive.

But it also means that any contributions your employer owes for the current quarter may now need to be reconciled before the new rules take effect.

Checking your super balance and confirming your employer contributions are up to date before 30 June is more important than ever this year.

Non-concessional contributions and the bring-forward rule

For investors who have already maxed their concessional cap, the non-concessional contributions cap for FY2026 is $120,000.

Investors under age 75 with a total super balance below $1.9 million may also be able to use the bring-forward rule. This allows up to $360,000 in non-concessional contributions over three years.

Non-concessional contributions, made from after-tax income, do not attract the 15% tax on entry. Once inside super, they grow in the same tax-advantaged environment as concessional contributions and are drawn down completely tax-free in retirement.

Why what you invest in inside super matters as much as how much you contribute

Getting money into super before 30 June is step one.

Investing it wisely inside super is step two, and it matters just as much over the long term.

The ASX 200 has returned approximately 8.5% per annum including dividends since inception.

Inside a 15% tax environment, this figures translates into one of the best compounding engines available to Australian investors.

Fully franked ASX dividend shares are particularly effective inside super.

Wesfarmers Ltd (ASX: WES), which has grown its fully franked dividend every year since 2020, generates franking credits that inside a super fund taxed at 15% effectively boost the after-tax yield above what most other income investments can offer.

BHP Group Ltd (ASX: BHP), with its fully franked dividend backed by copper and iron ore earnings, provides both income and exposure to commodity price growth over a long-term holding period.

These ASX stocks are quality, dividend-paying businesses that superannuation funds are designed to hold for decades.

Foolish takeaway

30 June 2026 is an opportunity to lock in meaningful tax savings, maximise the compounding power of one of Australia's most tax-advantaged investment structures, and set yourself up for a more comfortable retirement than you would otherwise have.

For those interested in maximising the potential of their super, now is the time to act.

The post Why 30 June is the most important date for your superannuation this year appeared first on The Motley Fool Australia.

There will always be stories of investors who picked the perfect small-cap ASX stock at the perfect time. But for most people, a more realistic path is much simpler.

It involves investing regularly, owning quality assets, reinvesting dividends, and giving compounding enough time to work.

That may not sound exciting, but it can be extremely powerful.

Start with consistency

The first step is getting money into the market regularly.

This could be $200 a month, $500 a month, or more depending on someone's financial position. The exact amount matters less than the habit.

Regular investing also helps remove some of the pressure of market timing. Investors will buy during strong markets, weak markets, and everything in between. This is known as dollar-cost averaging.

It does not guarantee a profit or protect against losses, but it can make the process easier to stick with.

Own quality businesses

The next step is deciding what to buy.

One approach is to focus on high-quality ASX shares with strong market positions, reliable earnings, and long growth runways. Companies such as Wesfarmers Ltd (ASX: WES), Macquarie Group Ltd (ASX: MQG), and REA Group Ltd (ASX: REA) are examples of businesses that have created significant wealth for shareholders over long periods.

Another option is to use exchange traded funds (ETFs). These can provide exposure to hundreds or even thousands of shares in a single trade, which can be helpful for investors who do not want to pick stocks.

The key is diversification. Building wealth should not depend on one company, one sector, or one idea going perfectly.

Let dividends do more work

Dividends can play a role in long-term wealth creation.

Many ASX shares pay dividends, and some also come with franking credits. Investors who do not need the income immediately can reinvest those dividends to buy more shares.

Over time, those extra shares can generate their own dividends. This creates a compounding effect, where returns start producing more returns.

In the early years, the progress can feel slow. But as the portfolio grows, compounding can become much more noticeable.

Time is your friend

The biggest advantage some investors have is time.

If an investor put $500 a month into ASX shares and achieved an average annual return of 10%, they could build a portfolio worth more than $1 million after 30 years.

That return is broadly in line with long-term share market averages, but it is not guaranteed. Some years will be strong, while others will be weak or even negative.

The main thing is staying the course when markets fall. Selling during downturns can interrupt compounding and turn temporary volatility into permanent damage.

Overall, becoming rich from ASX shares is about making sensible decisions repeatedly, staying diversified, and allowing time to do the heavy lifting.

The post How to become rich by investing in ASX shares appeared first on The Motley Fool Australia.

Defensive stocks are companies whose earnings tend to remain relatively steady throughout times of economic instability. They typically operate in "non-discretionary" industries where demand remains relatively stable even when consumer confidence dips. 

Their stable nature means they can help reduce the volatility of an overall investment portfolio.

This is particularly important during the current economic climate, where geopolitical tensions, stubbornly high inflation, and erratic sentiment are causing some ASX stocks to fluctuate wildly in value.

Here are three excellent ASX defensive stocks I'd have in my portfolio to weather the next storm.

Telstra Group Ltd (ASX: TLS)

Telstra is a dominant Australian telecommunications company. 

It owns and operates the nation's largest mobile network and is a major fixed-line internet provider. Mobile phone and internet services are not considered daily necessities but rather discretionary items, which makes Telstra a classic ASX defensive stock.

The company is well-positioned to record a stable revenue and earnings, regardless of the stage of the economic cycle or how the ASX is faring overall.

Telstra's defensive nature also means it can pay shareholders a consistent, reliable passive income. 

The telco's most recent dividend was paid out in March. Shareholders were given an interim dividend of 10.5 cents per share, 90.48% franked. 

For FY26, Telstra is forecast to pay a total dividend of 21 cents (up from 19 cents in FY25). This translates to a forward dividend yield of around 4.1% excluding franking credits, at the time of writing. 

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a leading Australian blue-chip company. At the time of writing, the business is the 7th largest company listed on the ASX with a market cap of around $90 billion. 

The company is well-established and financially sound with a history of reliable growth and stability. 

It's this stability and consistent long-term net profit growth that make the company a fantastic ASX defensive stock. It also means Wesfarmers is able to pay a reliable and consistent passive income to shareholders.

Wesfarmers' most recent dividend payment was handed out to investors in February. The Kmart and Bunnings owner paid a fully-franked interim dividend of $1.02 per share, up 7.4%.

For FY26, the ASX defensive stock is expected to pay a total $2.13 dividend per unit, which translates to a forward dividend yield of around 2.7% at the time of writing.

Transurban Group (ASX: TCL)

Transurban is a global infrastructure business that builds and operates major urban toll road networks, tunnels, and bridges. It operates 22 assets across Australia, the US, and Canada.

It is widely considered a high-grade defensive ASX dividend stock. 

That's because roads are an essential service. Even in the event of a downturn, people still need to travel to work or transport goods and services. Transurban's toll roads typically have stable traffic volumes year-round, which means the business enjoys resilient cash flow regardless of economic conditions. 

Another bonus is that most of its toll roads are on an annual contract. This means Transurban is able to increase its toll prices each year in line with rising inflation.

In February, the toll road operator paid an interim dividend of 34 cents per share, unfranked, to its shareholders.

For FY26, the company has forecast a distribution of 69 cents per security, which implies a forward dividend yield of around 4.6%, at the time of writing.

The post 3 ASX defensive stocks to buy while sharemarkets are volatile appeared first on The Motley Fool Australia.

At the close of the ASX on Wednesday afternoon, the conglomerate's shares ended marginally lower, down 0.15% to $79.03 a piece.

Wesfarmers shares have now rebounded around 11% from a 52-week low recorded in late-May. But they're still 3% lower for the year-to-date and 6% below trading levels seen this time last year.

For context, the S&P/ASX 200 Index (ASX: XJO) is around 1% higher for the year-to-date and 4% higher than 12 months ago, at the time of writing. 

So, why are Wesfarmers shares catching investor attention this week?

Earlier this week, Wesfarmers made a major business restructuring announcement.

In a post to the ASX, Wesfarmers said that the Industrial and Safety businesses, Blackwoods and Workwear Group, will transition into Wesfarmers-owned Bunnings Group.

Management said the change is expected to improve operational efficiencies, strengthen Bunnings' position in the small and medium-sized business market. This is all while also retaining Blackwoods and Workwear Group as standalone brands.

The Industrial and Safety businesses will transition to Bunnings on 1 July 2026. Their financial contributions will be included in Bunnings' results for the first half of the 2027 financial year. 

Bunnings will continue to disclose key sales metrics excluding Blackwoods and Workwear Group, such as total retail sales and store-on-store sales. 

Wesfarmers does not expect to record any material one-off costs associated with the transition and will provide further updates at its full-year results in August 2026.

The announcement comes ahead of Wesfarmers' upcoming annual strategy briefing day next week. 

Management is expected to provide updates on Bunnings' growth planes, Kmart and Officeworks financial performance, and the long-term earnings outlook.

It looks like investors are buying back into the shares in the hope that the update will be impressive.

What's next for the shares?

According to TradingView data, analysts are reserved about the outlook for Wesfarmers shares over the next 12 months.

Out of 11 analysts, seven have a hold rating on the Bunnings and Kmart owner's shares. Another two have a buy or strong buy rating, and two have a sell rating.

The average $75.21 target price implies a potential 5% downside at the time of writing. Meanwhile, some analysts think the shares could climb 6% higher to $84, and others think Wesfarmers shares could sink another 17% to $65.97.

The post Why is everyone talking about Wesfarmers shares this week? appeared first on The Motley Fool Australia.

Property is tangible, familiar, and for the past three decades it has delivered extraordinary returns in most capital cities.

But is it actually the best way to build retirement wealth?

When you run the numbers carefully, the answer for most Australians is probably not.

Combining superannuation and ASX shares, particularly fully franked dividend payers, builds wealth in ways that property simply cannot replicate at the same tax efficiency or cost.

The super advantage most investors underestimate

Superannuation is a tax-privileged structure that dramatically accelerates wealth compounding over time.

Earnings inside super are taxed at just 15% during the accumulation phase, compared to your marginal tax rate outside super.

In retirement, superannuation earnings become completely tax-free.

Compare that to an investment property, where rental income is taxed at your marginal rate and capital gains are taxed at up to 24.5% after the CGT discount.

Furthermore, from 1 July 2026, payday super requires employers to pay superannuation contributions at the same time as wages. This means every pay cycle immediately compounds inside this tax-advantaged structure.

The power of that compounding, at a lower tax rate, over a 30 to 40-year career can be extraordinary.

Why ASX shares inside super compound so effectively

Fully franked ASX dividends inside superannuation are particularly powerful.

The 30% franking credit attached to a fully franked dividend from a stock like Commonwealth Bank of Australia (ASX: CBA) or Wesfarmers Ltd (ASX: WES) is essentially a tax refund from the ATO.

Inside super, where the tax rate on earnings is 15%, the fund receives a 15% net tax credit on top of the dividend itself.

That effective yield boost is unavailable to property investors, who instead pay income tax on rental receipts.

Furthermore, the ASX 200 has returned 8.53% per annum including dividends since inception.

This figure, inside a superannuation structure with 15% earnings tax and franking credit refunds, translates to an after-tax return that few property markets can match after accounting for stamp duty, agent fees, body corporate fees, maintenance, and periods of vacancy.

The property argument is not without merit

Property does offer leverage that shares inside super generally do not.

A $200,000 deposit on a $1,000,000 property gives five times leverage, which can dramatically amplify returns in rising markets.

However, that same leverage amplifies losses in falling markets, adds interest rate sensitivity, and creates cash flow risk through vacant periods.

The RBA's three rate hikes in 2026 alone have materially increased mortgage costs for millions of Australian property investors. These events have demonstrated exactly how quickly leveraged property can shift from asset to liability.

The importance of the 30 June deadline

The concessional contributions cap, including employer contributions, currently sits at $30,000 for FY2026. Amounts not contributed by 30 June cannot be carried forward without satisfying the unused cap conditions.

For investors who are below that cap, topping up superannuation with additional salary sacrifice contributions before 30 June can be a very tax efficient decision.

Every dollar contributed to super at 15% concessional tax rather than at a marginal rate of 32.5% or higher is a permanent and compounding tax saving.

Foolish takeaway

Property has made many Australians wealthy and may continue to do so.

But the combination of superannuation's tax advantages and the long-term compounding power of fully franked ASX shares is a wealth-building combination that most Australians underutilise.

For investors willing to maximise their super contributions and hold quality ASX dividend shares inside that structure, the retirement wealth outcome over 20 to 30 years is likely to be more optimal than most property strategies, with less complexity, lower costs, and no 2:00am phone calls about leaking taps.

The post How combining superannuation and ASX shares can set you up for retirement better than property appeared first on The Motley Fool Australia.

Passive income received in superannuation in the retirement portion of life could be tax-free. Isn't that appealing?

Readers may be wondering how much an investor would need to receive a large amount of dividends each year. Let's take a look at the required amount for that goal.

$9,000 of passive income each month from superannuation

Getting $9,000 per month would be $108,000 each year. That'd be a very satisfactory amount for most Australians and could fund a comfortable lifestyle.

How large the nest egg needs to be to receive $108,000 per year essentially boils down to what the portfolio yield is.

For example, if someone's portfolio had an average dividend yield of 5%, they'd need a $2.16 million portfolio.

But, if the average dividend yield was 7.5%, an investor would need a $1.44 million portfolio.

If the average dividend yield were 3%, then an investor would require a portfolio size of $3.6 million.

There are plenty of options when it comes to aiming for these sorts of yields. I'll point to a few ASX shares below. I have invested in a number of the names below to create a diversified, strong portfolio with a good yield and still have compelling growth prospects.  

Which ASX dividend shares I'd buy

There isn't one right answer when it comes to investing for passive income in superannuation.

But it's true that a business with a lower dividend yield may be investing more of its earnings back into itself to drive more growth for shareholders.

Some of the impressive businesses with a lower dividend yield include Lovisa Holdings Ltd (ASX: LOV), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Wesfarmers Ltd (ASX: WES). I expect pleasing compounding of the dividend payout over the next three to five years.

Some of the compelling ASX dividend shares with a dividend yield of around 5% are names like exchange-traded fund (ETF) WCM Quality Global Growth Fund (ASX: WCMQ), listed investment company (LIC) Long Short Fund Ltd (ASX: LSF) and industrial real estate investment trust (REIT) Centuria Industrial REIT (ASX: CIP).

Turning to the higher-yield options I'd consider, names that spring to mind include WCM Global Growth Ltd (ASX: WQG), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and WAM Microcap Ltd (ASX: WMI).

The post How much is needed in superannuation to target a $9,000 monthly passive income? appeared first on The Motley Fool Australia.

As we can see on the chart above, the business has seen plenty of volatility in the years following COVID-19.

Despite that, the company has registered a capital gain of 44% over the prior five years, at the time of writing.

The owner of Kmart and Bunnings has done well for shareholders and I believe that it has the potential to continue rising.

How many Wesfarmers shares you could buy with $10,000

Five years ago, if an investor decided to put $10,000 into the ASX retail share, they could buy 181 Wesfarmers shares.

But, thanks to the pleasing gain of the business, an investor can now only buy 125 shares, at the time of writing.

Clearly, it would have been better to buy a few years ago then today with $10,000. But, we can also see that the business is cheaper now than it was between August to October 2025.

Is this the right time to invest in the ASX retail share?

The business has certainly seen plenty of economic changes in the last five years, with the end of the COVID-era consumer spending, the jump in inflation and interest rates, a few rate cuts last year and now more inflation and rate rises.

Through all of that, the business has served customers well and given them great value products through Kmart and Bunnings. At the same time, their scale and efficient spending have allowed those businesses to achieve a high return on capital (ROC), which in turn has led Wesfarmers to achieve a return on equity (ROE) of more than 30%.

The company has managed to regularly find a compelling place to put money to earn a good return.

For example, with its Anko product business, it has opened a number of stores in the Philippines, which gives it a useful growth avenue considering how large the population is there. I'm also excited by Wesfarmers expansion into lithium mining with how much the lithium price has risen in the last year.

According to CMC Invest, there have been eight ratings on the Wesfarmers share price in the last three months, with only two of those being a buy, five being a hold and one being a sell.

However, the average price target is $76.81, implying not much of a gain from here in the year ahead.

Therefore, there could be better ideas out there.

The post 5 years ago, $10,000 bought 181 Wesfarmers shares. But how many would it buy now? appeared first on The Motley Fool Australia.