Wesfarmers Shares Bouncing Off Lows: Analyst Upgrade Boosts Sentiment
Wesfarmers shares (ASX: WES) rose after Morgans upgraded the stock from “Trim” to “Accumulate,” citing improved lithium price assumptions. Morgans lifted its 12-month target to A$81.10 from A$80.50 and raised FY27/FY28 EBIT forecasts by 2% each. The company reported H1 revenue of A$24.2bn and NPAT of A$1.603bn.
How this was made
The 30-second read
Why it matters
The key market repricing channel is outer-year earnings via lithium price assumptions and Covalent Lithium ramp-up, reinforced by reported half-year resilience and a higher interim dividend.
Market read
A broker upgrade tied to lithium assumption stabilization is driving a rebound, but the stock’s next leg depends on whether lithium prices and ramp-up sustain the revised earnings outlook.
What to watch
Retail margin risk from freight/fuel and consumer spending downturn could offset lithium gains, limiting follow-through beyond the broker note.
Background
Wesfarmers has been underperforming, hitting 52-week lows, while lithium pricing is described as improving in 2Q 2025 vs 1H 2025.
Ticker impact
Morgans upgraded Wesfarmers to ‘Accumulate’ citing higher lithium-price assumptions and raised FY27/FY28 EBIT forecasts.
Near-term upside bias, but likely choppy trade as shares test prior resistance and depend on lithium stabilization.
The catalyst is a broker model change tied to lithium assumptions and Covalent ramp-up, but the article flags key swing risk: whether prices keep stabilizing.
Market effects
Battery materials/lithium price stabilization narrative may improve sentiment for lithium-linked earnings models and JV ramp expectations.
Australian consumer and resources-linked conglomerate sentiment may improve as analysts re-rate earnings durability beyond near-term retail pressures.
EV/battery demand expectations remain the macro driver behind lithium assumption resets, influencing global lithium sentiment.
Counterpoint
The upgrade may be largely assumption-driven; if lithium prices revert, outer-year EBIT uplift could unwind quickly.
Key entities
- companyWesfarmers
Upgraded to ‘Accumulate’ on improved lithium-price assumptions; outer-year EBIT forecasts raised and Strategy Briefing Day set for June 10, 2026.
- brokerMorgans
Raised rating from ‘Trim’ to ‘Accumulate’ and increased the 12-month target price to A$81.10.
- joint_ventureCovalent Lithium (JV with SQM)
Wesfarmers’ 50% stake is highlighted as a medium-term earnings driver as production ramps with recovering prices.
