The Wesfarmers Ltd (ASX: WES) share price has been a solid performer over the last five years, rising by 40%. Investors may be wondering what’s next after that strength.
The owner of Kmart and Bunnings has proven very effective at reinvesting for long-term growth. Rising earnings is the best thing a company can do to send its share price higher.
I’d need a crystal ball to know exactly what’s going to happen next for Wesfarmers, but we can look at its most recent trading update, analyst earnings estimates and Wesfarmers share price targets to give insights.
Recent sales performance
The company said with its FY26 result that in this environment its retail divisions are well-positioned to grow profitably, supported by their strong value credentials, focusing on improving the customer experience and expanding addressable markets.
Some of those struggles for Australian consumers include cost of living pressures, uncertainty about the outlook for inflation, house prices, interest rates and tax settings. Costs of doing business are reportedly weighing on business confidence and spending.
To mitigate the higher costs of doing business, of elevated labour, energy and supply chain costs, Wesfarmers’ said it will continue to execute their productivity agendas, through a ‘people-first, digitally-enabled’ approach including digitising operations and leveraging AI and technology to support operating efficiency.
In the first seven weeks of the 2027 financial year, Bunnings’ sales growth was slightly stronger compared to the second half of the FY26, partly helped by unseasonably dry weather in July. In the second half of FY26, Bunnings achieved revenue growth of 4%.
Kmart Group’s sales growth for the first seven weeks of FY27 was in line with the second half of FY26. In the six months to 30 June 2026, Kmart Group’s revenue growth was 2.3%.
Wesfarmers said that Officeworks’ sales growth in the first seven weeks of FY27 was positive, though it was slightly below the second half of FY26 growth rate of 2.8%.
Within WesCEF (chemicals, energy and fertilisers), the company said that it, along with its joint venture partner, remain focused on the ramp-up of the Covalent Lithium refinery, with production rates expected to accelerate through the second half of FY27 as further odour mitigation solutions are implemented.
Product qualification with key offtake partners will continue to progress while the refinery ramps up. Spodumene concentrate (lithium) production at Mt Holland is expected to be in line with nameplate capacity of approximately 380kt (with WesCEF’s share being approximately 190kt), with around half of this production to be sold to the market.
Finally, the company said the healthcare division of Wesfarmers is well-positioned to continue improving earnings by executing its transformation program and capitalising on long-term health and wellness trends. This division remains focused on accelerating growth in its higher-margin consumer business and building on recent improvements in wholesale.
Wesfarmers share price predictions by analysts
According to CMC Invest, there has been a mixture of analyst opinions on the business.
Within the last three months, there have been three buy call ratings, three hold call ratings and five sell call ratings.
Of those 11 analyst ratings, the average price target was $77.69. That implies a possible rise of around 1%, so it seems virtually fully valued according to experts. But, according to the projection on CMC Invest, it could pay a grossed-up dividend yield of 4.5%, including franking credits, at the time of writing. So, it could still produce positive returns.
The most optimistic price target is $88.80, which implies a possible rise of around 16%.
Overall, I think Wesfarmers is a high-quality business that can compound over the long-term, but analysts seem to be suggesting that there are better value opportunities out there.
The post How much could the Wesfarmers share price rise in the next year? appeared first on The Motley Fool Australia.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.