Pinned straw:
Thought I'd search for a broker report on Murdoch's Factiva platform after Wesfarmer's 52 week high despite the competition watchdog eyeing Bunnings.
Only found one from JP Morgan written in May 24
Think it's a little too bearish?
When report mentions Kmart, Officeworks and Bunnings are the highest quality retail business, I think it is a buy regardless of the recommendation when you can't find anything out there that is comparable.
@edgescape JP Morgan are relatively bearish on $WES compared with others.
15 covering brokers are at $59.73 ( range $43.00 - $$72.10),….so current SP is at top of the range.
Fwd P/E is 31.5x vs a 13 year average of 31.1.
Below is the front page of GS, who have moved from buy to neutral on recent SP strength. At a PT of $68.80 they are a relative bull. (You can access full report via CommSec).
While the FY result might reset both SP and brokers relative to each other, $WES is on my watchlist and I am not a buyer here.
That said, I don’t have my own view on its valuation nor whether the market is optimistic or pessimistic on the major business units.
@edgescape Not sure why the market is so bullish compared with the "Professional Spreadsheet Jockeys".
It's one of the larger gaps in the last 5 years between SP and Consensus. On the previous two occasions, it took a pandemic (ealry 2020) and a result (Aug-2021) to bring it back "in line".
Are the analysts still generally cautious on retail? (No, for $NCK, $HVN, $AX1, $UNI, $APE ..... but yes for $JBH,... as a quick straw poll)
I'm not following $WES closely enough to have my own hypothesis. It's skill as a great capital allocator is hardly a secret.
Perhaps the next result will bring both lines back towards each other? Or ... ?
