2025-05-22-Jefferies-西农集团（WES）_战略日要点_12页_809kb

Wesfarmers Equity Research Summary

Wesfarmers is an Australian conglomerate focused on retail and industrial sectors, with divisions including Bunnings, Kmart, Officeworks, and WesCEF. The Jefferies Equity Research report issued on May 22, 2025, maintains a HOLD rating with a price target lowered to AUD74.00, down from AUD75.00, reflecting downward revisions due to lower lithium prices, ammonia costs, and FX headwinds. The target implies a 11% downside from current levels.

The company emphasizes customer value and long-term shareholder returns through organic growth and productivity initiatives, rather than pursuing acquisitions. Key strengths include high-returning divisions like Bunnings and Kmart, but recent acquisitions such as Covalent, Health, and Catch have underperformed, leading to setbacks. Covalent faces larger-than-expected losses due to higher operating costs and lower commodity prices.

Focusing on internal capital allocation, Wesfarmers has prioritized investments in areas like supply chain automation, data capabilities, and retail media to drive efficiency. A major initiative is doubling Kmart sales through store refreshes and digital expansion, but risks include dependency on third-party platforms potentially undermining its value perception. Additionally, the company is cautiously exploring US tariff benefits for banking potential, though reinvestment in prices may be limited.

Financially, the report forecasts steady earnings growth but cautions on valuation, with EV/EBITDA multiples indicating comparability risks. Downside factors include housing market conditions, consumer sentiment, wage growth, and foreign exchange volatility, while upside comes from lithium demand and energy transition in WesCEF.

The SoTP valuation method assigns EV/EBITDA multiples to discrete business units, resulting in a fair value below current market levels, with ESG and sustainability targets set for packaging and emissions reduction by 2030.

Key risks: Inability to capture tariff benefits fully, M&A opportunities lacking scale, and potential supply chain disruptions.