A: Although I have been a huge fan of Wesfarmers and tipped that it would get to $60, I didn’t quite follow why it got over $67. Now, it is trading at $57.32.

That’s despite its full year profit result generally considered to be a “beat”. Covid is having quite an impact on Bunnings in NSW with store closures and supply chain disruptions, and the logic of a 200c capital return (rather than a share buyback, special dividend etc) was underwhelming.

The analysts still think Wesfarmers is over-priced (they have been wrong on Wesfarmers for some time). According to FN Arena, the consensus target price is $56.75. Range is a low of $49.00 from Citi through to a high of $62.00 from UBS. There are no “buy” recommendations – 6 “neutrals” and  1 “sell”.

I think this is a reasonable entry point for long term holders. For traders, I think it might head a little lower – there is value under $55.