Own Wesfarmers (ASX:WES) shares? Here’s what to watch when the company reports this week

The Wesfarmers Ltd (ASX: WES) share price has moved into the green today despite a slow start to the day’s trading. At the time of writing, Wesfarmers shares are up 1.3% at $54.57 each, having earlier slipped to $53.48.

Possibly weighing on investors’ minds is Wesfarmers’ upcoming half-year earnings results. Yes, Wesfarmers is due to declare its earnings report this Thursday. As one of the largest and oldest blue-chip shares on the S&P/ASX 200 Index (ASX: XJO), Wesfarmers’ results are always well followed.

So what should investors watch out for from the conglomerate on Thursday?

Well, the first thing Wesfarmers’ shareholders might be anticipating is an update on the company’s plans to acquire the Priceline pharmacy operator Australian Pharmaceutical Industries Ltd (ASX: API).

Last week, Wesfarmers announced that the Australian Competition and Consumer Commission (ACCC) had confirmed it will not oppose the takeover offer of $1.55 a share for API.

Any updates on this process would probably be welcomed by shareholders on Thursday.

Wesfarmers to report half-year earnings this week

The last time Wesfarmers reported, it was for its FY2021 full-year results that were delivered last August. Back then, the company declared revenues of $33.94 billion. That was up 10% year on year. Net profit after tax was also up, by 16.2% to $2.42 billion.

But it was the 17.1% increase to Wesfarmers’ final dividend, as well as the $2.3 billion capital return for shareholders, that probably excited investors the most. Last year, Wesfarmers paid out an interim dividend of 88 cents per share on its FY21 half-year earnings. So no doubt investors have their fingers crossed that FY22 will bring with it an interim dividend pay raise.

But something else that could impact the Wesfarmers share price is how the businesses fared in the wake of the latest COVID wave. As we’d all be aware, the final months of 2021 were defined by the outbreak of the COVID Omicron variant.

While this wave did not see the kind of lockdowns or restrictions we have had in the past, it did result in a ‘shadow lockdown’ of sorts. Not to mention staffing issues. So no doubt shareholders will be anxious to see how Bunnings, Officeworks, and the other businesses Wesfarmers runs fared over this time.

What’s ahead for the Wesfarmers share price?

Earlier this month, broker Morgans seemed to be bullish on Wesfarmers ahead of its earnings. The broker rated Wesfarmers shares as a buy, with a 12-month share price target of $60.80.

Morgans noted that “COVID-related staff shortages are proving to be a challenge”. Even so, it has enormous confidence in Bunnings in particular. It sees the recent share price pullback as “a good entry point for longer-term investors”.

The Wesfarmers share price is down around 2% over the past 12 months and almost 9% year to date.

This ASX 200 blue chip has a market capitalisation of $61.06 billion.

The post Own Wesfarmers (ASX:WES) shares? Here’s what to watch when the company reports this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 owns and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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