BUZZ-Australian conglomerate Wesfarmers gains; MS expects Bunnings to outperform

Shares of Australia's Wesfarmers WES.AX rise 1.2% to A$76.37

Stock gains as much as 1.5% to A$76.58 earlier in the day, hitting its highest since late Aug. 2024

Analysts at Morgan Stanley expect the conglomerate's hardware chain Bunnings to outperform rival Metcash MTS.AX in 1H25, owing to its over-exposure to trade services

Expect Wesfarmers' Kmart operations to continue to benefit from current trading conditions, potentially from recent underperformance in the Smiggle brand, owned by Premier Investments PMV.AX

Brokerage expects market to look out for commentary by WES on online competition from rivals such as PDD-owned PDD.O Temu, and Amazon AMZN.O

Look for commentary on tariff impacts to Kmart, potential to grow exposure to underutilised factories in China - MS

Brokerage has "underweight" rating on WES and A$60.7 PT

Stock up 6.7% YTD