Wesfarmers Ltd (ASX: WES) shares have underperformed over the past 12 months, slipping 17.1% over the period.

The analyst team at Jarden believe a turnaround is on the way, however, with a modest share price improvement forecast over the next year.

Muted revenue growth for FY26

Wesfarmers, which owns Bunnings, Kmart, and its lithium mining operations WesCEF, grew its revenue in FY26 by just 3.4% to $47.3 billion.

Net profit came in at $2.9 billion, down 1.8%.

The Jarden team said the drop in the Wesfarmers share price over the past year meant that it was “nearing its oversold territory”.

They added:

The weakness is a function of negative earnings per share revisions and macro concerns. We view these concerns as overdone – with WES’ retail divisions consistently growing regardless of the cycle.

Jarden said Australian consumers were facing headwinds, with cost-of-living pressures eroding cash flow and discretionary spending growth halving.

With this as the backdrop, they looked at Wesfarmers’ performance over the past 20 years to assess how it performed through the cycles.

Our conclusion: a combination of share gains, space growth, expandable categories and an everyday low pricing offer that outperforms in cyclical downturns, has seen WES’ brands consistently deliver sales growth over the past 20yrs. The above, combined with its category killer status and marketplace/AI push, leaves WES retail well-positioned to continue this growth. We see limited risk to consensus, with market margin forecasts arguably conservative, led by Bunnings, which is forecast to contract 6 basis points in FY27. This is despite sourcing, productivity and mix benefits that should see Bunnings continue its 2H26 margin trend, the biggest lift since 2021.  

Jarden said Wesfarmers management was executing well, with a clear plan, and they believed there was upside developing into FY28.

They said there was an opportunity for Wesfarmers to become the leading customer-facing business in Australia across health, consumables, and energy, “and while this will take time and money, we don’t believe it’s reflected in the current share price”.

Jarden said earnings growth was likely to accelerate into FY28 as Wesfarmers’ digital and AI push drove better return on invested capital, similar to the experience of Walmart in the US.

Share price should appreciate

Jarden has a price target of $83.20 for Wesfarmers shares, compared with the current $75.77.

If achieved, this would constitute a 9.8% return, with the company also paying a 3.3% dividend yield.

Wesfarmers is valued at $85.9 billion.

The post In a tough retail environment, what’s the outlook for Wesfarmers shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Walmart and 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.

Commonwealth Bank of Australia (ASX: CBA) and Coles Group Ltd (ASX: COL) shares are starting October from very different positions.

CBA shares are trading around $150.30 on Friday, not far from their 52-week low. Coles shares, meanwhile, are around $23.05 and much closer to their 52-week high.

Even so, I would be happy to buy both.

CBA shares

CBA has become more interesting to me as the share price has moved closer to the lower end of its recent range.

The shares are only slightly above their 52-week low of $146.97, which gives investors a much better starting point than they had earlier in the year.

I still would not call CBA cheap in an absolute sense. Consensus forecasts point to earnings per share (EPS) of $6.67 in FY27 and $6.86 in FY28, compared with $6.58 in FY26. That means investors are still paying a premium for fairly modest earnings growth.

But I think there are reasons the market consistently gives CBA that premium.

It is Australia’s largest bank, has a powerful deposit franchise, and remains a leader in digital banking. Those strengths have helped it build a highly profitable business that I would be comfortable owning through different economic conditions.

The dividend supports the buy thesis. CBA paid $5.05 per share in FY26, with consensus forecasts pointing to dividends of $5.15 in FY27 and $5.30 in FY28. This represents dividend yields of 3.4% and 3.5%, respectively.

For me, I like the combination of quality, resilience, and a gradually rising dividend at a share price much closer to the year’s lows.

Coles shares

Coles is a different story. Its shares are trading around $23.05, not far from their 52-week high of $24.59. Ordinarily, that might make me more cautious.

But I think the earnings outlook gives the share price some support.

Coles generated EPS of 81.3 cents in FY26. Consensus forecasts point to EPS of 98.2 cents in FY27, $1.05 in FY28, and $1.15 in FY29.

That is a much stronger growth profile than CBA, with earnings expected to rise by more than 40% between FY26 and FY29.

I like that Coles combines this growth with the defensive qualities of supermarkets.

Australians still need groceries regardless of what is happening in the broader economy, while improvements in efficiency, supply chains, and operations can help Coles turn steady sales growth into stronger earnings.

The dividend is also expected to move higher, from 78 cents in FY26 to 83.5 cents in FY27, 88.8 cents in FY28, and 97.4 cents in FY29.

So while the shares are close to their highs, I think the business has the earnings growth to justify a higher valuation than it commanded a few years ago.

Foolish takeaway

I would be buying CBA and Coles shares for different reasons in October.

CBA appeals to me because the share price has come back towards its lows while the underlying business remains strong.

Coles is closer to its highs, but I think its earnings trajectory gives the shares room to keep progressing.

For me, both still deserve a place on the buy list.

The post Why I’d buy CBA and Coles shares in October appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Lendlease Group (ASX: LLC) share price may be in focus after the company announced an update on the sale of its interest in the Milano Santa Giulia (MSG North) project in Milan, Italy. Key highlights include an extension of the deadline for the sale and potential future funding commitments.

What did Lendlease Group report?

• Update on sale of MSG North development rights to Bizzi & Partners S.p.A
• Original sale conditions not yet satisfied; deadline extended to 15 October 2026
• Transaction closing remains uncertain and may be further extended
• If sale falls through, Lendlease may need to fund approximately $160 million in project obligations in 1H FY27

What else do investors need to know?

Lendlease previously arranged to sell its stake in the MSG North project through its Heartbeat Fund to an investment group led by Bizzi & Partners S.p.A, a local Italian developer. However, as conditions precedent have not been met, both parties have agreed to push out the satisfaction deadline to 15 October 2026.

The ongoing uncertainty means the timeline for finalising the sale could move again. Should the transaction not complete, Lendlease stated it will likely be required to provide significant project funding, which could impact cash flow in the first half of FY27.

What’s next for Lendlease Group?

Lendlease will continue working with its transaction partner to try to fulfil the remaining conditions required for the sale. Investors should keep an eye on future updates about the transaction, particularly given the potential financial exposure if the sale does not go through.

Looking ahead, the group’s next steps with the MSG North project are highly dependent on whether the sale completes. Lendlease may have to reassess its funding priorities and capital allocation depending on the outcome.

Lendlease Group share price snapshot

Over the past 12 months, Lendlease shares have declined 55%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 3% over the same period.

View Original Announcement

The post Lendlease Group extends MSG North sale deadline, outlines possible funding requirement appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.