Ord Minnett sees a FY23 and FY24 gross margin risk for discretionary retailers. Following supply chain pressures, retailers built in 'safety stock' buffers that should support near-term sales in the current robust environment. However, a sales slowdown is expected.

Wesfarmers is among the retailers with gross margins at risk. The broker retains its Lighten rating and $43.20 target.

Sector: Food & Staples Retailing.

Target price is $43.20.Current Price is $45.02. Difference: ($1.82) - (brackets indicate current price is over target). If WES meets the Ord Minnett target it will return approximately -4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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