** Analysts at Morningstar say Australia's Wesfarmers WES.AX is proving to be a defensive stock during a time of a very disruptive retailing environment

** Says WES's earnings have been less volatile compared to other large-cap cyclical stocks over recent years

** Lifts fair value estimate on Australia's largest conglomerate by 30% to A$58; lowers uncertainty rating to "low" from "medium"

** Morningstar expects annual earnings growth at Wesfarmers to average 8% over the next five years, supported by lithium hydroxide sales beginning and rebound in lithium prices

** Believes market is much more optimistic around Wesfarmers' forecast

** Also forecasts company's Bunnings business to grow faster than the hardware retailing sector

** Despite our large fair value upgrade, shares are significantly overvalued - Morningstar

** Stock up 17.6% YTD

(Reporting by Rishav Chatterjee in Bengaluru)

((Rishav.Chatterjee@thomsonreuters.com;))