Wesfarmers share price drops 4%: Time to buy?

The Wesfarmers Ltd (ASX: WES) share price is falling with the market on Wednesday.

At the time of writing, the conglomerate’s shares are down 4% to $46.60.

What’s going on with the Wesfarmers share price?

Investors have been selling down the Wesfarmers share price today amid a broad market selloff which has seen the ASX 200 index drop 2.7%.

The catalyst for this was a surprisingly hot inflation reading in the United States. While many in the market were expecting inflation to cool in August, it actually increased month over month.

This has led to fears that the US Federal Reserve will be forced to make more aggressive rate increases to tame inflation, putting the United States and the global economy at risk of falling into a recession.

One thing that investors don’t like is uncertainty. And with the market swimming in it at the moment, it isn’t overly surprising to see many investors heading to the exits.

Is this a buying opportunity?

One broker that may see the Wesfarmers share price weakness as a buying opportunity is Morgans. It recently named the company among its best ideas list for September. It commented:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. While COVID-related staff shortages are proving to be a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the pullback in the share price as a good entry point for longer term investors.

Morgans has an add rating and $55.60 price target on the company’s shares.

The post Wesfarmers share price drops 4%: Time to buy? appeared first on The Motley Fool Australia.

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More reading

• Why this top broker is tipping 15% upside for the Wesfarmers share price
• How I’d invest $10,000 in ASX shares if I were saving for a house
• Brokers rate these ASX dividend shares as buys
• Buying Wesfarmers shares? Here’s why the company says Bunnings can continue to outperform
• Could these ‘little’ businesses be a secret weapon for Wesfarmers shares?

Motley Fool contributor James Mickleboro 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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