2023 to date has been quite kind to the Wesfarmers Ltd (ASX: WES) share price. Wesfarmers shares started the year at $45.46 each.
Yesterday, this ASX 200 retail and industrial conglomerate closed at just under $50 a share – $49.98 to be precise. That means this blue-chip stock is up a healthy 9% over the year to date.
Over the past 12 months, the company is also in the green, having banked a return of 7%, as you can see below:
Wesfarmers investors have enjoyed similar gains over just the past month. Back on 7 July, Wesfarmers closed at $46.79 a share, which means investors have enjoyed a gain of close to 7% since then.
But perhaps some would-be Wesfarmers investors have been put off buying the shares now that this company is back over the $50 mark.
Some investors might also be waiting to see what Wesfarmers has to say in its upcoming earnings report before pulling the trigger. Wesfarmers is scheduled to report its full-year earnings for the 2023 financial year on 25 August.
As is the case for most companies, a good result could see the shares vault even higher from here. But conversely, if Wesfarmers disappoints with its full-year performance, we could see the shares lose value after investors get a look at its books.
So today, let’s discuss whether it would be worthwhile buying Wesfarmers shares today at over $50 each.
Are Wesfarmers shares a buy at nearly $50 each?
Of course, we can’t know what Wesfarmers will pull out of its corporate hat until 25 August. But we can look at what one ASX broker is saying about the company today.
Late last month, my Fool colleague discussed the views of ASX broker Morgans on Wesfarmers shares.
In news that would have delighted shareholders, Morgans gave the company an add rating, along with a 12-month share price target of $55.50. If realised, that would give the shares a gain of 11% above the current price Wesfarmers is sitting at today.
Here’s what Morgans said about its positive view of the company:
WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart, and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy.
We believe WES’s businesses, which have a strong focus on value, remain well-placed for growth despite softening macro-economic conditions.
It gets even better. The broker is also predicting that Wesfarmers will be able to keep its dividend rising over the coming 12 months. Morgans has $1.79 in fully franked dividends per share pencilled in for FY2023 (implying a payment of 91 cents for October’s final dividend), rising to $1.92 per share for FY2024.
So that’s obviously good news for shareholders and implies that today’s share price of $50 is still cheap for the company. Let’s now wait and see what Wesfarmers’ earnings later this month have in store for investors.
