Goldman Sachs upgrades Wesfarmers to ‘buy’, lifts price target
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The news: Goldman Sachs analysts have upgraded their rating on Wesfarmers to ‘buy’ citing new drivers of growth that will drive earnings and valuation at the conglomerate.
The numbers: The brokerage upgraded the rating to ‘buy’ from ‘neutral’ and also lifted its 12-month price target on the stock to $78.70 a share, from $69.50 earlier.
Wesfarmers shares are up 1.7% to $73.53 in early trading on the ASX.
The context: The analysts forecast Wesfarmers to have the highest earnings per share compounded annual growth rate of 10% in their top five consumer coverage versus peers such as Woolworths, Coles, Endeavour and JB Hi-Fi.
A key factor driving higher earnings will be Bunnings’ continued market share gain against a soft operating backdrop, they said. Another factor would be Bunnings long-term growth options in terms of sales per square metre and opening up of further adjacent revenue streams such as Retail Media and Marketplace.
They also expect the lithium and health segment to be scaled up to deliver double digit earnings growth in FY26.
The source: Goldman Sachs research
