The Wesfarmers Ltd (ASX: WES) share price has come back sharply from its highs.

At around $75.86 on Wednesday, the shares are now roughly 20% below their 52-week peak.

That is a meaningful pullback for one of the ASX’s best-known blue chips. But has it gone far enough to create a top buying opportunity?

Here is how I see it.

Why I like Wesfarmers

Wesfarmers owns a collection of businesses that already have strong positions in their respective markets.

Bunnings remains the standout for me. Its scale, brand strength, and dominant position in home improvement give Wesfarmers a business that would be extremely difficult to replicate.

Kmart has also become an increasingly important part of the group, with its value-focused offering giving consumers a reason to keep shopping even when household budgets are under pressure.

Officeworks adds another established retail business, while Wesfarmers also has exposure to industrial and other operations.

That mix means the company is not relying on a single product or customer group to drive earnings.

I also like the way Wesfarmers has approached capital allocation over many years. Management has shown a willingness to invest where it sees attractive returns and move away from businesses where the opportunity becomes less compelling.

For a long-term investor, I think that discipline is a major part of what makes Wesfarmers stand out.

The earnings outlook still looks healthy

The recent weakness in the Wesfarmers share price would concern me more if analysts were also expecting profits to fall.

That is not currently the case. Wesfarmers generated earnings per share (EPS) of $2.53 in FY26. Consensus forecasts indicate EPS could increase to $2.72 in FY27, $2.90 in FY28, and $3.11 in FY29.

By FY29, earnings would be around 23% above the FY26 level, which would give the business a reasonable base from which to grow.

The dividend is also expected to move higher alongside earnings. Consensus estimates point to dividends per share of $2.34 in FY27, $2.49 in FY28, and $2.71 in FY29.

For me, that adds another layer to the investment case. Wesfarmers is not just relying on share price appreciation to generate returns.

Is the valuation attractive enough?

This is where I would keep expectations sensible. At $75.86, Wesfarmers is trading on a P/E ratio of around 28 times estimated FY27 earnings.

That is still a premium valuation, so I would not describe the shares as cheap simply because they have fallen 20%.

But the picture improves as earnings grow. By FY29, today’s price would represent roughly 24 times forecast earnings.

I think that is easier to justify for a business with the quality of Bunnings, the momentum of Kmart, and a strong long-term record of capital allocation.

Foolish takeaway

I think Wesfarmers is becoming a much easier share to buy at around $76.

The valuation still asks investors to pay for quality, so I would not expect a bargain-style return simply because the shares are 20% below their high.

But I think the combination of strong businesses, steady earnings growth, and rising dividends makes today’s price look increasingly reasonable.

For me, that is enough to put Wesfarmers back near the top of my ASX buy list.

The post Down 20%: Is the Wesfarmers share price a top buy? appeared first on The Motley Fool Australia.

More reading

• How much passive income can I earn from a $950,000 superannuation balance?
• How much passive income can I make from a $100,000 ASX share portfolio?
• 3 defensive ASX shares I’d buy in a market sell-off
• Buy, hold, sell: Goodman, Wesfarmers, BHP shares
• Wesfarmers vs Woolworths: Which ASX dividend share looks better this month?

Motley Fool contributor Grace Alvino has positions in Wesfarmers. 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.

Bell Potter has recently started coverage of Sports Entertainment Group Ltd (ASX: SEG), and the broker believes big things are in store for the company.

New acquisition to drive growth

Sports Entertainment Group operates the SEN sports radio network across Australia, and also has operations in digital media, live events, television syndication, and talent management.

Bell Potter said the company offers an attractive proposition for advertisers.

As they said:

SEG has curated a portfolio capable of delivering a whole-of-sport strategy targeting a valuable cohort for advertisers at the top of the funnel, then additional value as content filters through operating channels/segments; this operating model delivered an underlying EBITDA contribution margin of 20.4% in FY26 versus group underlying margin of 14.8%.

Sports Entertainment Group also recently finalised the takeover of New Zealand group MediaWorks for $107.6 million.

The company said when announcing the takeover that they expected the acquisition to be materially earnings per share accretive before synergies were factored in.

Synergies were estimated at about $5 million per year.

Sports Entertainment Group said MediaWorks was New Zealand’s number-one audio business, with about 59% audience share in the 25-to-54 demographic.

Sports Entertainment Group Chief Executive Officer Craig Hutchinson said after the deal was finalised:

Today marks a landmark moment for Sports Entertainment Group. Completing the acquisition of MediaWorks which is New Zealand’s #1 audio business transforms SEG into a truly scaled, trans-Tasman media group reaching more than 5 million listeners across Australia and New Zealand. This is exactly the kind of strategically important and value driving transaction we have been building toward. Both businesses are performing strongly into Q1 FY27. We are already seeing the benefits of the combination in our advertiser conversations and digital platform integration planning. The MediaWorks management team, led by CEO Wendy Palmer, has been outstanding throughout this process and we look forward to building something exceptional together.

Media shares looking cheap

Bell Potter said in its research note on the company that it expected the company to generate a compound annual growth rate of 13% in EBITDA from FY26 to FY29.

The company was expected to benefit from NZ$50 million in tax losses held by MediaWorks, as well as a healthy calendar of major sporting events over the medium term.

Bell Potter also expected the company to restart dividend payments at the end of FY28.

The broker has a price target of 45 cents on Sports Entertainment Group shares, compared to 26.5 cents currently.

If achieved, this would constitute a 69.8% return. The company is valued at $84.8 million.

The post Top broker says this ASX stock could rise 70% appeared first on The Motley Fool Australia.

More reading

• AGL, Cochlear, WiseTech shares: Buy, hold, sell
• Down 20%: Is the Wesfarmers share price a top buy?
• Are CBA shares still worth buying near $150?
• Droneshield vs NextDC: Which ASX tech share is the better buy?
• How much passive income can I earn from a $950,000 superannuation balance?

Motley Fool contributor Cameron England 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.

Commonwealth Bank of Australia (ASX: CBA) shares are trading around $151.07 on Wednesday.

That follows a weaker period for Australia’s largest bank, with investors weighing up higher interest rates, a cooling housing market, and what both could mean for earnings.

So, with the share price back around $150, is CBA still worth buying?

Why CBA remains so popular

CBA has long been one of the most highly valued banks on the ASX, and I think there are good reasons for that.

Its scale gives it a powerful position across mortgages and deposits, while years of investment in digital banking have helped make it an important part of customers’ everyday financial lives.

That combination has allowed CBA to generate strong returns while maintaining a large and relatively stable funding base.

It also helps explain why investors have traditionally been willing to pay a premium for the shares compared with other major banks.

The question today is whether that premium still makes sense as the economic backdrop becomes more difficult.

Housing and rates are creating pressure

CBA’s recent share price weakness has coincided with a tougher period for Australia’s housing market.

National home prices fell for a sixth consecutive month in September and were 5.2% below their peak, while higher borrowing costs have reduced buyer purchasing power and weighed on transaction activity.

Interest rates are adding to that pressure. The Reserve Bank of Australia lifted the cash rate by another 25 basis points in late September to 4.6%, its highest level in 15 years. The RBA has also left the door open to further tightening if inflation remains too high.

For CBA, that creates a mixed picture. Higher rates can support banking margins depending on how quickly lending and deposit rates move. But they also make mortgages more expensive, reduce borrowing capacity, and can eventually weigh on credit growth or increase financial stress among customers.

The RBA still believes most mortgage borrowers are relatively well placed, with less than 2% of variable-rate owner-occupiers currently estimated to have a cash flow shortfall.

That gives me some comfort, but I would still expect the housing and rate environment to remain an important influence on CBA over the next year.

Does $151 look reasonable?

CBA earned $6.58 per share in FY26, and consensus forecasts point to modest earnings per share growth to $6.67 in FY27 and $6.86 in FY28.

At $151.07, the shares are valued on a P/E ratio of roughly 22.6 times FY27 earnings.

I would not call that cheap. Investors are still paying a substantial price for CBA’s quality.

But I am more comfortable with that valuation when the share price is around $150 than I was at considerably higher levels.

The dividend also continues to move in the right direction. After paying $5.05 per share in FY26, consensus forecasts point to $5.15 in FY27 and $5.30 in FY28.

Foolish takeaway

I would still buy CBA shares at around $150.

The housing downturn and higher interest rates give investors legitimate reasons to be more cautious, and I do not think the current valuation leaves room for complacency.

But the recent pullback has made the price easier for me to accept. CBA remains the major Australian bank I would most want to own, and at around $150, I think the quality of the business is worth paying for.

The post Are CBA shares still worth buying near $150? appeared first on The Motley Fool Australia.

More reading

• How much passive income can I earn from a $950,000 superannuation balance?
• If I invest $10,000 in CBA shares today, what could they be worth in October 2027?
• How much could the big 4 banks’ share prices fall?
• Buy, hold, sell: CBA, Capstone Copper, Codan shares
• Why I’d buy CBA and Coles shares in October

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.