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Wesfarmers Limited (WFAFF)

NEUTRAL
Consumer CyclicalHome Improvement RetailAustralia

Fundamental

64

Price

$82.69

Market Cap

$93.49B

Part 1 · What the company is worth

Overview

Wesfarmers is an Australian conglomerate that owns a group of separately run retail and industrial businesses rather than making one product itself. Its best-known chains are Bunnings (hardware and home improvement), Kmart and Target (discount department stores) and Officeworks (office and stationery retail), alongside a health and pharmacy retail arm and a chemicals, energy and fertiliser manufacturing business, WesCEF. Each business keeps its own brand, stores and management, competing separately in its own market.

How it makes money

Revenue is largely ordinary retail sales — customers paying at the checkout in thousands of Bunnings, Kmart, Target and Officeworks stores and online across Australia and New Zealand — plus industrial sales of chemicals, explosives and fertiliser to mining and farming customers. Bunnings and Kmart Group are by far the largest contributors, each generating tens of billions of Australian dollars a year; Officeworks and WesCEF are considerably smaller. Profit depends mainly on how well each division executes in its own market, not a single group-wide driver.

Competitive moat

Brand · Narrow

Bunnings, by far the group's largest earner, is Australia's dominant home-improvement retailer, with a scale of stores and supplier relationships that a new entrant would take years to match, and a brand many Australian households default to without comparison shopping. That advantage is real for Bunnings but does not automatically extend to Wesfarmers' other, less dominant retail chains.

What drives demand

Moderately cyclical

The group mixes defensive and discretionary demand: home-improvement and pharmacy spending tend to hold up reasonably well in a downturn, while discount department store sales at Kmart and Target and office-supplies sales at Officeworks are more sensitive to household budgets. WesCEF's chemicals and fertiliser business adds exposure to commodity prices and agricultural cycles that have little to do with Australian consumer spending at all.

The case for

Buyers argue that spreading across several leading retail brands and an industrial chemicals business smooths out a downturn in any single one, that Bunnings' scale advantage keeps compounding profit growth, and that FY2025's double-digit profit rise across most divisions shows the model still working.

The case against

Sellers worry that a conglomerate this size is hard to grow quickly from its current base, that WesCEF's earnings already fell as commodity prices weakened, and that discretionary chains like Kmart, Target and Officeworks remain exposed to a slowdown in Australian household spending.

Written by the editors, published on August 18, 2026

Direct competitors

Who this company fights with for the same customers

No editorial profile for this company yet

No competitor list for this company yet.

Balance Sheet & Liquidity

Revenue

$46.46B

Trailing 12 months to the last reported quarter — estimated from per-share metrics

Net Income

$3.06B

Trailing 12 months to the last reported quarter — estimated from per-share metrics

Free Cash Flow

$3.42B

Total Equity

$9.19B

Total Liabilities

$18.79B

Current Ratio

1.19

Interest Coverage

24.34

Debt/EBITDA

2.10

Earnings Per Share

Revenue & Net Income

Free Cash Flow

Income Breakdown

Historical statement

Margins over time

Debt over time

How heavy the debt is

Growth grid

Growth — Revenue

Fair Value Estimation

Fairly Valued

Fair Value

$78.09

Current Price

$82.69

Margin of Safety

-5.9%

Fair Value Range

$65.12 - $91.07

Estimation Methods

Analyst Target:$77.05
DCF:$86.81
PE-based:$85.32
Graham Growth:$74.70
EPV:$37.84
Analyst Consensus:Sell (1B / 8H / 11S)
Last Earnings Surprise:+1.90%

Valuation Metrics

P/E Ratio

30.50

ROE

31.8%

P/B Ratio

11.90

P/FCF

27.32

Gross Margin

34.3%

ROIC

15.4%

Profitability Radar

Value Creation (Economic Moat)

ROIC

15.4%

WACC

7.6%

ROIC − WACC

+7.7 pp

ROIC exceeds the cost of capital — the company is creating value for shareholders.

Fundamental Analysis Criteria

Passed (17)

  • EPS shows upward trend
  • EPS CAGR 7.48%
  • Price CAGR 11.14%
  • ROIC 15.4%
  • Gross Margin 34.3%
  • P/FCF 27.32
  • Debt/Equity ratio
  • Operating Margin 10.0%
  • Positive Free Cash Flow
  • Current Ratio
  • Interest Coverage
  • Debt/EBITDA
  • ROE 35.9%
  • Revenue Growth 5Y 8.2%
  • Share Dilution 0.1%
  • Net Margin Trend 6.4% vs 5.8%
  • Piotroski F-Score 6/9

Failed (7)

  • P/B Ratio 11.90
  • CapEx intensity
  • Price below Graham Number
  • DCF valuation (Overvalued)
  • Analyst Consensus 5% Buy
  • Earnings Surprise avg 1.1%
  • PEG Ratio 2.89

Unavailable (4)

  • Dividend Payout NaN%
  • Return on Tangible Assets
  • Low reliance on intangibles
  • Earnings Quality (OCF/Net Income)

Piotroski F-Score

6/9

Mixed signals: some areas need attention

score
criteria

Earnings Quality

-

Low quality: investigate accounting

Share Dilution

0.1%

Share count is stable

Governance

Executive Team

NameTitleAge
Mr. Robert Geoffrey ScottMD, CEO & Director55
Mr. Anthony Natale GianottiChief Financial Officer56
Ms. Aleksandra SpaseskaCFO & Managing Director of Kmart Group-
Mr. Michael SchneiderMD of Bunnings Group and MD of Bunnings Australia & New Zealand54
Dan HarloeInvestor Relations Manager-
Ms. Maya vanden DriesenGroup General Counsel-
Rebecca KeenanMedia & Public Affairs Manager-
Ms. Jennifer BryantChief Human Resources Officer-
Ms. Marina JoanouManaging Director of Target-
Damian McGloughlinManaging Director of BUKI-

Audit Risk

4

Board Risk

2

Compensation Risk

3

Shareholder Rights Risk

1

Part 2 · The price and when to enter

This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.

Latest News

Recent headlines for WFAFF, sourced from Markets Gazette.

No recent news for WFAFF.