Operating Margin

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Price: 48.05 EUR -0.22% Market Closed

Market Cap: €54.5B

8.9%

No historical data

Operating Margin shows how much profit a company makes from its regular business activities after covering operating costs. It helps measure how efficiently the company turns sales into profit.

Operating Margin

8.9%

Operating Income

AU$4.1B

Revenue

AU$45.7B

Operating Margin shows how much profit a company makes from its regular business activities after covering operating costs. It helps measure how efficiently the company turns sales into profit.

Operating Margin

8.9%

Operating Income

€4.1B

Revenue

AU$45.7B

Peer Comparison

Country	Company	Market Cap	Operating Margin
AU	Wesfarmers Ltd ASX:WES	94B AUD	Loading...
AU	BHP Group Ltd ASX:BHP	245.8B AUD	Loading...
AU	Woolworths Group Ltd ASX:WOW	37.1B AUD	Loading...
AU	Coles Group Ltd ASX:COL	28.2B AUD	Loading...
AU	Worley Ltd ASX:WOR	6.7B AUD	Loading...
US	Target Corp NYSE:TGT	48.9B USD	Loading...
CA	Dollarama Inc TSX:DOL	52.6B CAD	Loading...
US	Dollar General Corp NYSE:DG	32.3B USD	Loading...
US	Dollar Tree Inc NASDAQ:DLTR	25.9B USD	Loading...
JP	Pan Pacific International Holdings Corp TSE:7532	2.8T JPY	Loading...
JP	Ryohin Keikaku Co Ltd TSE:7453	1.6T JPY	Loading...

Market Distribution

Min	-14 949 200%
30th Percentile	-526.4%
Median	-25.2%
70th Percentile	6.1%
Max	145 596.9%

Other Profitability Ratios

Wesfarmers Ltd
Glance View

Economic Moat

None

Market Cap

54.5B EUR

Industry

Retail

In the vast, sunburned expanse of Australia, where the economy hums more like a well-tuned machine than a casual outback song, Wesfarmers Ltd. stands as a towering figure. Emerging from its humble beginnings in 1914 as a co-operative for Western Australian farmers, it has evolved into one of the country's largest and most diversified public companies. Wesfarmers' journey resembles a meticulously well-crafted novel, with each chapter capturing its ventures across industries and sectors. Today, Wesfarmers operates primarily in retail, with its flagship brands like Bunnings Warehouse, Kmart, and Target touching nearly every aspect of Australian daily life, offering everything from home improvement products to affordable household items. Its retail operations thrive on a model of meeting consumer demand through an extensive network of stores supported by highly efficient supply chains. But the story of Wesfarmers extends beyond retail aisles and shopping carts. The company skillfully diversified its portfolio, weaving in operations in chemicals, fertilizers, and industrial safety products, thereby ensuring its financial resilience. It manages a balanced ecosystem where each business unit contributes strategically to the bottom line. This approach allows Wesfarmers to generate revenue not merely through direct sales but also through an interplay of industrial and commercial synergies. While retail remains the lion’s share of its income, Wesfarmers' strategic investments in technology and innovation in both its traditional and non-traditional sectors highlight an underlying mantra of sustainable growth and careful market adaptation, firmly anchoring it as a pivotal player not only in Australia but also in the broader economic landscapes it navigates.

View WF3 Analysis

WF3 Intrinsic Value

Overvaluation 26%

Intrinsic Value

Price

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

Wesfarmers Ltd
SWB:WF3

Peer Comparison

Market Distribution

Other Profitability Ratios

Wesfarmers Ltd
Glance View

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Wesfarmers Ltd SWB:WF3