Jefferies flags brighter outlook for Wesfarmers' Bunnings; capital return potential

WESFARMERS

04/08/2025 24:27

** Jefferies sees improving sales outlook for Wesfarmers' WES.AX Bunnings as rate cycle turns and early signs of housing recovery emerge; green shoots also flagged in hardware and frame & truss

** Expects Kmart and Officeworks operations to benefit from easing inflation and early-stage recovery in discretionary retail

** Brokerage flags WES may consider A$1–$2/share capital return or special dividend, supported by A$870 mln ($562 mln) in divestment proceeds and one-off Bunnings property restructure gain

** FY25 is cycling the leap day in the pcp in February which will be a modest drag to sales and earnings of less than 0.5%, says Jefferies

** Brokerage marginally lifts PT to A$74.5 from A$74; maintains "hold" call on stock

** Two of 13 analysts rate the stock "buy" or higher, four "hold" and seven "sell" or lower; their median PT is A$73.80 – according to data compiled by LSEG

** Stock up 18.8% YTD

($1 = 1.5473 Australian dollars)

 (Reporting by Rishav Chatterjee in Bengaluru; Editing by Lincoln Feast.)

 ((Rishav.Chatterjee@thomsonreuters.com;))