Wesfarmers (ASX:WES) has a material opportunity in the medium term to become a leading customer-facing business in Australia across health, consumables, goods, and energy, but capitalizing on this window will require time and more capital expenditure, Jarden said in a Wednesday note.
The company struck an optimistic tone at its strategy day, although plans for its next growth phase are incremental rather than representative of a step change, the equity research firm said.
Wesfarmers "is executing well and has a clear plan within its existing corporate portfolio," but until it provides clarity on the longer-term plan, Jarden prefers Sigma Healthcare (ASX:SIG) and Woolworths Group (ASX:WOW) where "investment is clearer and earnings higher."
The investment firm came away more positive on Wesfarmers following its strategy day, but is cutting its fiscal year 2027 earnings per share forecast for the company by around 3%, while making a modest raise to the fiscal year 2028 estimate.
Jarden maintained a neutral rating on Wesfarmers on valuation grounds, while lifting the target price to AU$79.30 from AU$75.30.