Wesfarmers Limited (ASX:WES) heads into the final weeks of 2025 as one of the most closely watched blue‑chip stocks on the ASX, combining record profits, a $1.7 billion capital return, a fresh partnership with OpenAI, and a steady stream of product‑safety and privacy headlines.
At today’s price, the conglomerate behind Bunnings, Kmart, Target, Officeworks and a growing health and chemicals portfolio trades on a premium multiple, with analysts split over whether the stock is fairly valued quality or simply expensive defensiveness.
Wesfarmers (ASX:WES) share price snapshot on 10 December 2025
As of around 15:44 (GMT+11) on 10 December 2025, Wesfarmers shares were trading at about A$81.20, up slightly on the session and just above the previous close of A$80.51. Intraday, the stock has traded between A$80.16 and A$81.24. [1]
That puts Wesfarmers:
- Roughly in the middle of its 52‑week range of A$67.70 to A$95.18. [2]
- On a market capitalisation of about A$92 billion. [3]
- On a trailing P/E around 31–32x and a headline dividend yield of ~2.5% on its ordinary dividends. [4]
Different data providers estimate Wesfarmers’ year‑to‑date share price gain in 2025 at mid‑teens to high‑teens percentages, comfortably ahead of the broader ASX indices, reflecting both strong earnings and renewed enthusiasm for quality, defensive retail names. [5]
On the corporate news front, the latest ASX announcement today (10 December) is a Change of Director’s Interest Notice for non‑executive director Barbara English, reflecting share movements under the company’s capital management arrangements rather than a change in strategy. [6]
FY25: record earnings and a $1.7 billion capital return
For the financial year ended 30 June 2025, Wesfarmers reported another strong set of numbers:
- Statutory net profit after tax (NPAT) of just under A$2.9 billion, with
- Underlying NPAT (excluding significant items) of A$2.65 billion, up about 3.8% year‑on‑year. [7]
- Group revenue of roughly A$45.7 billion, up around 3–4% on the prior year. [8]
The growth was again led by the group’s two retail powerhouses:
- Bunnings delivered about 3.8% earnings growth, with profit before tax around A$2.3–2.4 billion, supported by continued demand for home‑repair and necessity products. [9]
- Kmart Group (including Kmart and Target) grew earnings by roughly 9% to around A$1.1 billion, as customers continued to trade down to value and embraced Kmart’s in‑house Anko brand. [10]
To complement those results, Wesfarmers announced a A$1.7 billion capital management initiative, funded partly by divestments, including the sale of its Coregas industrial gases business to Nippon Sanso and previous sales of WesCEF LPG/LNG distribution assets and a residual stake in Coles. [11]
The capital return package looks like this:
- A$1.50 per share special distribution, made up of:
- A$1.10 per share capital return, plus
- A A$0.40 per share fully franked special dividend,
subject to – and now having received – shareholder approval at the October AGM and an ATO ruling. [12]
- A higher final ordinary dividend of A$1.11 per share, up from A$1.07 last year, on top of a A$0.95 interim dividend, taking ordinary dividends for FY25 to A$2.06 per share. [13]
Taken together, ordinary dividends plus the one‑off capital management payout equate to around A$3.56 per share of cash for 2025, implying a total cash yield around the mid‑4% range at current prices, though a meaningful portion of that is non‑recurring. TechStock²+1
Dividend profile: quality income rather than a once‑off sugar hit
Broker research collated in recent independent analysis suggests most large brokers expect Wesfarmers’ ordinary dividends per share to grow steadily from here:
- From roughly A$2.06 in FY25 (ordinary only), to about
- A$2.08 in FY26,
- A$2.30 in FY27, and
- Around A$2.59 by FY28. TechStock²
On today’s share price, that implies a forward ordinary yield in roughly the 3.5–4% range, fully franked, without assuming another special distribution. TechStock²+1
This income profile underpins a steady stream of commentary framing Wesfarmers as an “ASX dividend stalwart” and a core holding for income‑oriented portfolios, especially given its long record of disciplined capital allocation and periodic capital returns. TechStock²+1
However, several analysts emphasise that 2025’s elevated cash yield is partly one‑off, and that investors should base decisions on the sustainable ordinary dividend and underlying earnings power of Bunnings, Kmart, Officeworks, Health and WesCEF rather than extrapolating the 2025 cash bonanza. TechStock²+1
OpenAI partnership: “ChatGPT Enterprise” comes to Bunnings, Kmart and beyond
A major new storyline for Wesfarmers in December is its partnership with OpenAI.
On 2 December, iTnews reported that Virgin Australia and Wesfarmers had both signed agreements with OpenAI. Wesfarmers said it had entered into a partnership to make ChatGPT Enterprise available across the group, coupled with custom training programs for staff. [14]
Managing director Rob Scott described the collaboration as part of the group’s push to accelerate the use of AI to empower teams, strengthen businesses and enhance shareholder value, noting that Wesfarmers is already using AI for demand forecasting, product design, customer service, marketing effectiveness and conversational commerce. [15]
Independent coverage of the deal highlights a few implications for investors: TechStock²+1
- Retail operations: Bunnings and Kmart were already experimenting with AI‑driven rostering and supply‑chain optimisation; integrating ChatGPT Enterprise could sharpen forecasting, inventory management and in‑store service.
- Customer engagement: Embedding conversational AI into apps and web experiences offers scope for more personalised product discovery and cross‑selling.
- Data & retail media: Wesfarmers has flagged growing digital, data and retail‑media capabilities as a margin lever; using OpenAI’s models could enhance those efforts, though the financial payoff will likely surface gradually rather than in a single earnings jump.
For now, the OpenAI partnership is better thought of as a strategic signal: Wesfarmers intends to be an AI‑heavy retailer and industrial group, not a cautious follower.
Growth pillars: Anko, Wesfarmers Health and lithium
Analysts increasingly frame Wesfarmers as more than just Bunnings and Kmart, even if those divisions remain the main profit engines.
Anko’s international expansion
Kmart’s private‑label Anko brand has transformed from a domestic discount line into a global growth vector. Wesfarmers and third‑party analysis note that Anko is resonating not only with value‑conscious shoppers but also with higher‑income households, and that the brand is expanding into markets such as North America and Asia via partnerships and online channels. [16]
Analysts see Anko’s international rollout as a key medium‑term profit driver, diversifying earnings beyond Australia and New Zealand.
Wesfarmers Health
The Health division – which includes the Priceline pharmacy network and related health and beauty assets – gives Wesfarmers exposure to structural growth in pharmacy, wellness and an ageing population, albeit from a smaller earnings base than Bunnings or Kmart. [17]
The company continues to invest heavily in store rollouts, digital capabilities and integrated health services, and many analysts regard Health as one of Wesfarmers’ long‑duration growth options.
Lithium and WesCEF
Through WesCEF and its lithium joint venture, Wesfarmers has a lever into global energy‑transition demand, though lithium prices have been volatile and current earnings contributions are modest. The 2025 full‑year materials highlight the sale of WesCEF’s LPG and LNG distribution businesses, freeing capital to redeploy into higher‑return areas, including chemicals and lithium. [18]
Together, these growth platforms underpin the recurring description of Wesfarmers as a “quality compounder” rather than a pure income stock. TechStock²+1
Regulatory and product‑safety headlines: asbestos recalls and facial recognition
2025 has also brought a series of non‑financial headlines that investors cannot entirely ignore.
Asbestos‑contaminated play sand and toy recalls
In November, more than 70 schools in Australia and New Zealand were closed after asbestos was found in widely used children’s play‑sand products. The recalls involved multiple brands and retailers, including Kmart, Target and Officeworks, which sit under the Wesfarmers umbrella. [19]
Subsequent weeks saw further product recalls:
- A “Make Your Own Unicorn Sand Ornaments” toy sold at Kmart and Target was recalled after asbestos was detected in coloured sand components. [20]
- Kmart later recalled certain “Sensory Activity Sets” featuring Bluey, Paw Patrol and Frozen 2 branding, again due to asbestos found in included sand, although regulators characterised the airborne risk as low. [21]
Regulators have stressed that the health risk from the specific sand products is considered low if the material is not disturbed, but the episode has prompted significant media attention and additional compliance and remediation work across the education sector.
One market report even noted that Wesfarmers shares rose following initial recall news, as investors concluded the financial impact would be manageable, though the reputational backdrop remains a risk factor. [22]
Facial recognition and privacy rulings
Wesfarmers has also been in the spotlight over its use of facial recognition technology:
- In November 2024, Australia’s privacy regulator found that Bunnings breached the Privacy Act by collecting customers’ facial images at dozens of stores without adequate consent or transparency. [23]
- In September 2025, the same regulator ruled that Kmart had similarly breached privacy law by using facial recognition to combat refund fraud, again without meeting legal requirements for sensitive biometric data. [24]
Bunnings is seeking review of the earlier decision, while Wesfarmers has said it is working with regulators to address concerns. The rulings do not appear to have dented near‑term profits, but they add to the company’s ESG and regulatory risk profile and may influence how aggressively Wesfarmers can use AI and surveillance technologies in future.
What analysts and models are saying about Wesfarmers stock
Valuation: “high‑quality, roughly fairly valued”
Across broker and independent platforms, a consistent theme emerges: Wesfarmers is widely viewed as a high‑quality, diversified conglomerate, but not obviously cheap at current levels.
A recent valuation review from Simply Wall St and others points to: [25]
- Return on equity (ROE) north of 30% (around 31–31.2%), unusually high for a conglomerate of this size.
- Multi‑year revenue growth forecasts in the low‑ to mid‑single digits, with group revenue projected to rise to roughly A$47.4 billion in FY26 (about 3.7% growth) and towards A$51–52 billion by FY28, with earnings approaching A$3.5 billion.
- Earnings growth that is respectable but not explosive, suggesting the current P/E in the low 30s already prices in a good portion of the story.
MarketScreener’s collation of broker targets shows: [26]
- Around 13 analysts covering Wesfarmers.
- A consensus rating around “Underperform”, with
- An average 12‑month target price near A$80.8, only fractionally above the previous close around A$80.5, and well below the 52‑week high near A$95.
Independent commentary on TS2.tech similarly characterises Wesfarmers as a “high‑quality compounding business priced roughly at fair value”, rather than a classic deep‑value opportunity, especially after the strong multi‑year share‑price run. TechStock²+1
The split: income‑focused bulls vs valuation‑sensitive skeptics
On the bullish side, supporters emphasise: TechStock²+2TechStock²+2
- Dominant positions in everyday categories via Bunnings, Kmart/Target and Officeworks.
- Exceptional returns on capital and a long record of disciplined capital management.
- Structural growth options in Health, lithium and digital/retail media.
- The 2025 capital return as evidence of management’s willingness to hand surplus cash back to shareholders.
On the more cautious side, analysts point out:
- A premium multiple relative to its expected mid‑single‑digit earnings growth, especially given pressure on consumer spending and rising costs.
- Execution risks in newer areas such as Health and lithium, where heavy investment is needed just to gain or defend market share.
- High dependence on Bunnings – any mis‑step in the hardware chain would be material. TechStock²+1
Quantitative technical models such as StockInvest’s have recently shifted Wesfarmers from “Sell” to “Hold/Accumulate”, but still describe a “wide and falling” medium‑term trend and flag the possibility of a mid‑teens price pull‑back over the next few months after a strong multi‑year run. TechStock²+1
Earnings and dividend forecasts to 2028
Pulling together consensus estimates from major data providers: [27]
- Revenue: Forecast to grow from about A$45.7 billion in FY25 to around A$47.4 billion in FY26 and roughly A$51–52 billion by FY28, implying ~4% compound annual growth.
- Earnings: Underlying profit is expected to grow more slowly near term (with some models even pencilling a small EPS dip in FY26) before rising to about A$3.5 billion by FY28.
- Ordinary dividends: As noted earlier, brokers generally expect low‑to‑mid single‑digit annual dividend growth, with ordinary DPS edging towards A$2.60 by FY28, supported by a strong balance sheet and cash generation.
- Cash returns: Most forecasts treat the 2025 capital return and special dividend as non‑recurring, though several note Wesfarmers’ history of periodic capital management when asset sales crystallise surplus capital.
In other words, the consensus view is for steady, not spectacular, growth, with the investment case hinging on quality and resilience rather than break‑neck expansion.
Key drivers for Wesfarmers shareholders into 2026
Investors watching Wesfarmers through 2026 will likely focus on several themes highlighted in recent company commentary and external analysis: [28]
- Australian consumer and housing cycle: Bunnings and Kmart benefit from resilient household spending on essentials and home improvement, but remain exposed to cost‑of‑living pressures and interest‑rate uncertainty.
- Bunnings and Kmart same‑store sales: Any slowdown in Bunnings, in particular, would challenge the premium valuation; continued share gains in value retail would support the bull case.
- Anko’s overseas traction: Evidence that Anko can become a meaningful brand in North America or Asia would strengthen the long‑term growth narrative.
- Wesfarmers Health performance: Progress in expanding the Priceline network and integrating health assets will be watched closely for signs that Health can become a third major profit pillar.
- Lithium price and project execution: Volatile lithium markets could swing returns from Wesfarmers’ battery‑materials exposure.
- Regulatory and ESG developments: Ongoing responses to privacy rulings, product‑safety recalls and potential tax changes loom in the background.
- AI and digital return on investment: Investors will look for concrete examples of margin improvement or sales uplift linked to the OpenAI partnership and broader data initiatives.
- Upcoming catalysts:
- The December 4 capital management distribution has now been paid, but its impact on the share register and trading dynamics may linger. TechStock²+1
- The next major results release, the FY26 half‑year, is currently pencilled in by data providers for mid‑February 2026 and should give the first real read‑through on trading conditions post‑capital return. TechStock²+1
Bottom line: how Wesfarmers stock looks on 10 December 2025
As at 10 December 2025, Wesfarmers sits firmly in the “quality at a reasonable (but not cheap) price” bucket:
- It delivers reliable earnings, exceptional returns on capital and a fully franked dividend stream, reinforced by a one‑off 2025 capital return. [29]
- It has credible growth options in Anko, Health, lithium and now AI‑enhanced retail and data. [30]
- But the stock also trades on a premium multiple, with many brokers seeing limited 12‑month upside from current levels and highlighting consumer‑macro, cost and regulatory risks. [31]
For long‑term, income‑oriented investors comfortable owning a dominant retail and industrial conglomerate through cycles, Wesfarmers remains widely regarded as a high‑quality core holding.
For valuation‑sensitive or more tactical investors, the present setup looks more finely balanced: the story is attractive, but much of that story already appears to be reflected in the mid‑30s earnings multiple and modest forecast upside.
References
1. www.google.com, 2. www.google.com, 3. www.google.com, 4. www.google.com, 5. www.raskmedia.com.au, 6. openbriefing.com, 7. www.reuters.com, 8. www.news.com.au, 9. www.reuters.com, 10. www.reuters.com, 11. www.reuters.com, 12. announcements.asx.com.au, 13. www.reuters.com, 14. www.itnews.com.au, 15. www.itnews.com.au, 16. www.reuters.com, 17. simplywall.st, 18. www.wesfarmers.com.au, 19. www.reuters.com, 20. www.news.com.au, 21. www.news.com.au, 22. www.marketscreener.com, 23. www.oaic.gov.au, 24. www.oaic.gov.au, 25. simplywall.st, 26. www.marketscreener.com, 27. simplywall.st, 28. www.reuters.com, 29. www.reuters.com, 30. simplywall.st, 31. www.marketscreener.com
