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Morningstar, Inc.

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Equity Bottom-Up

Narrow-moat-rated Wesfarmers expects its coal mines to generate an EBIT of AUD 135 to 140 million in the first half of fiscal 2017. This is a significant increase to the previous breakeven guidance for the division for the period, and a reported loss of AUD 310 million in full fiscal year 2016. However, in the context of an estimated group EBIT of AUD 4,475 million in fiscal 2017, the improved EBIT guidance is immaterial, particularly as we believe the current spike in metallurgical coal prices is unsustainable over the medium term.As such, we maintain forecasts and our AUD 39 per share fair value estimate, with the shares trading broadly in line with our intrinsic assessment.Analyst: Johannes Faul, CFA

Narrow-moat-rated Wesfarmers expects its coal mines to generate an EBIT of AUD 135 to 140 million in the first half of fiscal 2017. This is a significant increase to the previous breakeven guidance for the division for the period, and a reported loss of AUD 310 million in full fiscal year 2016. However, in the context of an estimated group EBIT of AUD 4,475 million in fiscal 2017, the improved EBIT guidance is immaterial, particularly as we believe the current spike in metallurgical coal prices is unsustainable over the medium term.As such, we maintain forecasts and our AUD 39 per share fair value estimate, with the shares trading broadly in line with our intrinsic assessment.Analyst: Johannes Faul, CFA

Upgrade of Resource Earnings Immaterial to Wesfarmers'Overall Results

Wesfarmers Ltd

Upgrade of Resource Earnings Immaterial to Wesfarmers'Overall Results