The Wesfarmers share price is rising again. Should I buy the stock now?

The conglomerate reported warmly received results last week and announced a large dividend.

| More on:
A smiling man at a shop counter takes payment from a customer, with racks of plants in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares for conglomerate Wesfarmers Ltd (ASX: WES) largely went sideways for all of this year, until about a week ago.

Over the past eight days, the stock has risen 9%.

So is this a buy signal? Are other investors aware of something you're not?

Let's see what's going on:

Why has the Wesfarmers share price risen?

There seem to be a couple of reasons for the recent arousal in the Wesfarmers share price.

First is that the market received the company's half-year results positively last week.

The Motley Fool's James Mickleboro reported that Wesfarmers' net profit after tax was up 3% to $1.4 billion despite tough conditions for the retail sector.

"This was driven largely by the Kmart Group business, which posted a 26.5% increase in earnings for the six months. 

"Management advised that its record result reflects the positive customer response to Kmart's lowest price positioning."

The second factor was the announcement that it would pay out a 91 cent dividend, which is the largest seen since April 2019.

Is it too late to buy?

So that's all fantastic, but is it still worth buying Wesfarmers this late?

Opinion among the professional community is mixed.

According to broking platform CMC Invest, only two out of 17 analysts currently rate Wesfarmers shares as a buy.

A majority of 10 professionals recommend a hold, while five are urging investors to sell out.

So the answer to those considering buying Wesfarmers shares is… probably not.

Perhaps the recent price rise has made it even less attractive. 

After all, if you go back to June 2022, the Wesfarmers share price has amazingly rocketed 55%. That's during a period when the Reserve Bank put interest rates up 13 times.

However, The Motley Fool's Sebastian Bowen is one that doesn't mind committing to the conglomerate now with a long-term horizon.

"Wesfarmers is a holding that I've been hoping to add to for a while now and just might after the company's latest earnings. 

"Given the rising cost of living and stubborn interest rates, I think this is a great result for a company that would traditionally be described as cyclical and discretionary."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why Droneshield, Meteoric Resources, Mount Gibson, and Tyro shares are charging higher

These shares are having a good time on hump day. But why?

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX was back in the black this Tuesday.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why DroneShield, Hansen, Hub24, and Paladin Energy shares are racing higher today

These shares are having a strong session. Let's find out why.

Read more »

Man on a laptop thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors weren't in a good mood this Monday.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Abacus Storage King, DroneShield, Hansen, and Macquarie Technology shares are charging higher

These shares are starting the week on a positive note. But why?

Read more »

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors finished the trading week on a sour note today.

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

4 ASX 200 stocks smashing the benchmark this week

Investors are sending these four ASX 200 stocks soaring this week. But why?

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

Why IGO, Johns Lyng, Lynas, and Web Travel shares are pushing higher today

These shares are ending the week on a high. But why?

Read more »