Down 28% this year, is the Wesfarmers share price at a turning point?

A woman sits at her computer in deep contemplation with her hand to her chin and seriously considering information she is receiving from the screen of her laptop regarding the Xero share priceA woman sits at her computer in deep contemplation with her hand to her chin and seriously considering information she is receiving from the screen of her laptop regarding the Xero share price

The Wesfarmers Ltd (ASX: WES) share price has tumbled over the last month of trade, extending losses to more than 28% this year to date.

After a series of downward moves, the Wesfarmers share price fell to its 52-week closing low of $41.16 on 17 June, as illustrated on the chart below.

However, it’s since bounced from that level, currently trading at $42.32 at the time of writing.

TradingView Chart

Is Wesfarmers reversing course?

The share is still bottom-heavy and has some way to go before clawing back to its May 2022 levels.

Despite this, it still has five buy calls and five hold calls from brokers, according to Bloomberg data.

Balancing the picture is that six brokers also say to sell Wesfarmers shares.

In a note today, analyst Mohsen Crofts, from Bloomberg Intelligence, wrote that Bunnings and Kmart are Wesfarmers’ key assets in its long-term growth.

Crofts wrote:

Wesfarmers-owned hardware chain Bunnings’ brand and operational strength could increase its revenue and market share from 2023 once Australian housing stabilises with interest rates.

Earnings performance at Kmart, Wesfarmers’ discount department store brand, should improve this year as Covid-19 related costs and restrictions ease.

Meanwhile, analysts at JP Morgan echoed the sentiment in a May note. The broker said, “Wesfarmers is a beneficiary of the retail and housing cycle, with three industry leading retailers.”

“Following the downsizing of Target, acquisitions of Catch and Kidman, as well as a de-rating post capital return, the share price outlook is favourable.”

Wesfarmers share price snapshot

In the last 12 months, the Wesfarmers share price has slipped more than 28% into the red, dropping almost 10% in the last month alone.

The conglomerate has a market capitalisation of around $48 billion based on the current share price.

The post Down 28% this year, is the Wesfarmers share price at a turning point? appeared first on The Motley Fool Australia.

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More reading

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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