2310 GMT [Dow Jones]--Wesfarmers's key retail businesses have more sales momentum than Citi expected, prompting the bank to upgrade its stock to neutral. Wesfarmers's Bunnings home-improvements chain is benefiting from an expanded tool shop, which Citi expects will be a meaningful driver of sales growth in FY 2026. "We now expect Bunnings to generate Ebit growth of 9% in FY 2026 (was 4%) on higher sales growth and improved operating leverage," analyst Adrian Lemme says. Similarly, Citi sees discount department-store chain Kmart holding its own even as consumer spending picks up. It now forecasts 10% Ebit growth in Kmart, compared to 4% before. "While the valuation is high, we no longer see an obvious earnings catalyst to warrant a sell rating considering our bullish view on consumer spending into FY 2026," Citi says. (david.winning@wsj.com)

(END) Dow Jones Newswires

August 28, 2025 19:12 ET (23:12 GMT)

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