Wesfarmers earnings watch: 3 things to look out for ahead of FY19 results

When will Wesfarmers announce its FY19 results?

Wesfarmers Ltd (ASX: WES) is set to announce its 2019 full-year results next Tuesday, August 27.

Will the Wesfarmers share price highs continue?

As we noted in our previous coverage of Wesfarmers, the company has recently seen its share price hit all-time highs.

Since that report last month, Wesfarmers Ltd's share price has traded stably: with its shares continuing to hover around the A$39 mark.

This recent bullish activity has likely been driven by a number of factors, including: the company's strong dividend, the recent acquisition of Catch.com and the intended purchase of lithium developer Kidman Resources.

During Wesfarmes’s full-year results announcement, investors will likely be keen to see if any progress has been made on the Kidman Resources acquisition – given that the company previously noted that it expected this deal to be finalised in September.

In saying that, new and indeed significant growth opportunities for large companies such as Wesfarmers (ASX: WES) may prove difficult to come by in the future.

Mind you, even though substantial growth may be hard for Wesfarmers to achieve, the company continues to post consistent financial results.

In the first-half of 2019 for example, the company reported significant revenues from continuing operations of A$14,388 million on profits after tax of A$1,080 million.

Maybe most importantly for income-oriented investors however, was Wesfarmers's 1H19 dividend(s). Impressively, the company paid a fully-franked interim dividend of 100 cents and a special dividend, also full-franked, of 100 cents – during the first-half.

Wesfarmers: the analyst take

Though consistent, analysts appear to have grown more bearish on the stock in the last three months, even as the conglomerate races to all-time share price highs.

Specifically, according to the Wall Street Journal, Wesfarmers (ASX: WES), which had one buy recommendation and only four sell recommendations three months ago, now has no buy recommendations and six sell recommendations.

Overall, the company’s consensus rating is underweight.

The Australian wealth management firm Morgans; for example, has a hold recommendation on Wesfarmers.

Here, Morgans analysts have argued that:

‘Given WES updated the market at the Strategy Briefing Day in June and guidance range provided for Kmart Group, we expect the [FY19] result to be in line with expectations. Consensus estimate for FY19 EBIT is A$3,023m.’

Even in light of these professional views, Wesfarmers Ltd (ASX: WES) has continued to be well liked by investors, outpacing the gains witnessed by the ASX 200 year-to-date – rising 22.95% in that period.

Wesfarmers currently has an impressive annual dividend yield of 5.67%.