Wesfarmers (ASX:WES) Valuation Check as ROE Shines, Anko Expands Overseas and Health Investments Build

Wesfarmers (ASX:WES) is back in the spotlight after fresh coverage highlighted its strong 31% return on equity, the expanding Kmart Anko rollout overseas, and ongoing investment in the Wesfarmers Health platform.

See our latest analysis for Wesfarmers.

Despite short term softness, with the share price down over the past quarter, Wesfarmers still trades at A$81.16 and its multi year total shareholder returns suggest momentum is consolidating rather than reversing.

If Wesfarmers growth story has caught your eye, this is a good moment to see what else is working in retail and adjacent sectors using fast growing stocks with high insider ownership.

So with Wesfarmers delivering strong returns while trading just above analyst targets and near fair value estimates, should investors treat the recent pullback as a fresh buying opportunity or assume the market already prices in future growth?

Most Popular Narrative Narrative: 0.4% Overvalued

With Wesfarmers last closing at A$81.16 against a narrative fair value of about A$80.82, the story hinges on modest growth and premium pricing.

Disciplined portfolio actions (wind-down of Catch, divestment of non-core assets, strategic reinvestment in core and adjacent growth areas, and continuous cost control) reduce volatility, unlock capital for higher-return initiatives, and support normalized margin and EPS expansion.

Read the complete narrative.

Want to see why steady growth assumptions still justify a premium multiple? The narrative leans on rising margins, resilient earnings, and a surprisingly rich future valuation. Curious which precise forecasts make that math work?

Result: Fair Value of $80.82 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, stubborn cost inflation and execution risks in health and lithium could squeeze margins, forcing analysts to reassess both growth assumptions and the premium valuation.

Find out about the key risks to this Wesfarmers narrative.

Build Your Own Wesfarmers Narrative

If you would rather dig into the numbers yourself and challenge this view, you can build a personalised Wesfarmers story in just minutes: Do it your way.

A great starting point for your Wesfarmers research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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