Forum Topics WES WES FY24 results

Pinned straw:

Added 2 months ago

$WES posted their FY results this morning.

I just wanted to call out the retail results. In the context of everything else we've seen sp far this reporting season for Australian retail, just look at those numbers for Bunnings, Kmart, and Officeworks. What a business...or group of businesses!

Kmart obviously a beneficiary of the value conscious retailer trading down. But it's more than that ... e.g.,members of my family get clothes there by choice over higher value brands.

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Not Held :-(

Solvetheriddle
2 months ago

@mikebrisy thanks for that ill have to have a closer look. those numbers are unbelievable. WES is almost a top-10 holding for me, but I rarely look at it. Target/Kmart I thought was a write-off years ago, Bunnings was always great. the job these guys have done on the Kmart group turnaround as it is known now is just extraordinary, an example of huge value creation. One i would not have forecast.

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edgescape
2 months ago

Wish I YOLOd my ALU into WES

Clearly not phased by the potential disruption of online platforms such as Amazon and Temu


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edgescape
2 months ago

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Versus AMZN

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Wesfarmers trading like a tech company

What can go wrong?

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occy
2 months ago

Hi @edgescape What platform is that? If you don't mind me asking.

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RhinoInvestor
2 months ago

Home Depot in the US trades at 25x P/E and Lowes is at 20x P/E.

I wonder if there is a Monopoly premium in there for Bunnings (much like most of the Mag7 enjoy). From what I can gather Bunnings has well over 50% market share and the rest of the retail hardware market is pretty fragmented.

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edgescape
2 months ago

MooMoo App

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edgescape
2 months ago

Price has declined since the release. I think it has something to do with here about Bunnings:

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All things being equal (no broker price targets etc...), I would be happy to buy at the historical 30x PE which is around 68 to 70

Also waiting for Covalent to switch from Lithium to Gold! Wouldn't make the ESG funds happy though. And I believe the Gold is not alot.

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mikebrisy
2 months ago

I'd love to own $WES. While I don't have my own independent valuation of it, it looks expensive on an historical basis.

Pre-pandemic, I think the P/E tended to be more around 20 or less, and you have to ignore retail P/E bumps during late-2020 to early-2022 because of the pandemic sugar-hit of people buying "Stuff".

There also seems to be a lot of future success in the SP today.


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edgescape
2 months ago

Hmm there's also the upcoming ACCC hearing on pricing with suppliers.

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pubenvelope
a month ago

Yes, I wish I bought into it when I was watching at around $50 earlier in the year.. Mad I didn't!

The average fair value is approximately AUD 64.06, so it looks like WES is currently a little overpriced IMO. Applying a 15% margin of safety suggests a target buy price of around AUD 54.45 per share. I don't think it will drop this low anymore unless there is something that impacts the entire market, so I think I'd be in at around $60. There's only one way WES goes, and that's up (again, IMO).


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