Wesfarmers – 1H19 Review

Wesfarmers WES 1H19 earnings beat market consensus, with EBIT of $1.62bn and underlying net profit increasing by 10% on the same time last year.

The company announced a special dividend of $1.00 per share.

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Bunnings sales grow by 5% and underlying earnings in the division increased by 7%.

Wesfarmers trades on a fair valuation at 17x earnings and a 5.2% forward yield. The stock provides investors optionality around an acquisition given the groups’ strong balance sheet.

Some caution needs to be exercised, should we see a weaker retail environment in the coming months.

We’re buyers of WES on the next pullback.

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