Financial analysts project potential earnings growth for Australian conglomerate Wesfarmers (ASX:WES).

The company’s Kmart chain is demonstrating sales resilience, meeting the expectations of a well-strategized cost management plan.

With brokers like Jefferies not relating Wesfarmers to the elevated margin levels prevalent among other discretionary retailers, prospects appear favorable.

Jefferies subsequently revised their target price for Wesfarmers, hiking it to A$57.00 per share from A$49.50 per share.

Moreover, they acknowledge that while the stock is not inexpensive, the promising outlook for core businesses, the imminent lithium earnings, and the potential upside from major expansion projects signify growth potential.

Citi’s analysts have revised their earnings before interest and taxes (EBIT) predictions for Wesfarmers for FY24 and FY25 upwards by 3% and 1% respectively.

They maintain that Kmart margins are seeing positive impacts of lesser freight and sourcing expenses, anticipating a continuation into 1H24.

Nonetheless, Citi suggests there might be room for Wesfarmers sales to slump as the eventual effects of interest rate hikes are yet to take full effect.

Among sixteen analysts, six rate the stock ‘buy’ or higher, seven suggest ‘hold’, and three rate it ‘sell’ or lower, their median price target being 49.80 per share.

The stock has ascended by 11.9% this year up until the last closing.

Wesfarmers (ASX:WES) is an Australian conglomerate with diverse business operations ranging from retail to industrial.