Jefferies remains bullish on Kingfisher (LON:KGF), arguing that the extreme rebasing of the group’s French business has ‘entirely overshadowed’ positives elsewhere, Citywire has reported. The comments come ahead of the DIY-retailer’s full-year results next week.
Kingfisher’s share price, which rose more than two percent yesterday, has been steady in London in early morning trade this Friday, having inched 0.21 percent higher to 239.50p as of 08:14 GMT. The stock is marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.39 percent higher at 7,213.29 points. The group’s shares have lost more than 31 percent of their value over the past year, as compared with about a one-percent gain in the Footsie.
Jefferies upbeat on Kingfisher
Jefferies reaffirmed Kingfisher as a ‘buy’ yesterday, while trimming its price target on the shares from 340p to 320p. Citywire quoted analyst James Grzinic as commenting that the broker believes that the DIY retailer’s shareholders “deserve a more transparent assessment of the group’s French execution shortcomings”.
“The extreme margin rebasing suffered by France has entirely overshadowed resilience in the UK and Poland,” he elaborated, adding that Jefferies believed that had resulted in a about 40 percent of the group’s sales and 30 percent of its earnings “to be valued at nothing”.
“We look forward to a more proactive approach by the board in addressing this aberration,” Grzinic concluded.
Other analysts on DIY retailer
Credit Suisse, which rates Kingfisher as an ‘outperform,’ lowered its valuation on the shares from 315p to 280p last month. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 261.25p.
RBC trimmed its rating on the B&Q owner last month, saying that it expects the earnings downgrade cycle to continue.
Kingfisher is scheduled to update investors on its full-year performance on Wednesday, March 20.