Australian conglomerate Wesfarmers gains; MS expects Bunnings to outperform

WESFARMERS

29/01/2025 02:50

** Shares of Australia's Wesfarmers  WES.AX  rise 1.2% to
A$76.37
    ** Stock gains as much as 1.5% to A$76.58 earlier in the
day, hitting its highest since late Aug. 2024
    ** Analysts at Morgan Stanley expect the conglomerate's
hardware chain Bunnings to outperform rival Metcash  MTS.AX  in
1H25, owing to its over-exposure to trade services
    ** Expect Wesfarmers' Kmart operations to continue to
benefit from current trading conditions, potentially from recent
underperformance in the Smiggle brand, owned by Premier
Investments  PMV.AX  
    ** Brokerage expects market to look out for commentary by
WES on online competition from rivals such as PDD-owned  PDD.O 
Temu, and Amazon  AMZN.O  
    ** Look for commentary on tariff impacts to Kmart, potential
to grow exposure to underutilised factories in China - MS
    ** Brokerage has "underweight" rating on WES and A$60.7 PT
    ** Stock up 6.7% YTD

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com;))