Wesfarmers Limited (WES.AX) stock analysis

In our weekly check, Wesfarmers Limited is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 18 pass, warnings: 4, red flags: 3.

About Wesfarmers Limited

Wesfarmers Limited is a Consumer Cyclical company (Home Improvement) based in Australia, listed on ASX as WES.AX.

What our checks show for WES.AX

Red flags

• The dividend takes 142% of profit: little cushion if profit falls.
• The stock has fallen as much as 66% from a peak. Would you have held through that?
• Recovering from its deepest fall took about 4.2 years.

Warning signs

• Net debt is 2.1x a year of EBITDA (debt/equity 1.59). That limits room in a downturn and raises refinancing risk.
• Analysts expect only about 4.6% a year of growth in revenue.
• Revenue grew only 2.8% a year over the last 3 years.
• The net margin is only 6.1%: little room if costs rise.

Strengths

• Operating cash flow is 1.49x net profit: the profit arrives as real cash.
• A large company: market value $64.12 billion.
• Return on capital (ROCE) is 18.1%: the business earns well on the money put into it.
• Pay in shares is only 0% of free cash flow.

Similar companies

LOW · HD

Questions

What grade does Wesfarmers Limited (WES.AX) have?

In our weekly check, Wesfarmers Limited is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 18 pass, warnings: 4, red flags: 3. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of WES.AX stock?

This week's biggest flags for Wesfarmers Limited: Dividend stretched, Deep past fall, Slow recovery after falls. In total 7 of 25 checks show a warning or a red flag.

What does Wesfarmers Limited do?

Wesfarmers Limited is a Consumer Cyclical company (Home Improvement) based in Australia, listed on ASX as WES.AX.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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