Kingfisher share price rises as RBC lifts valuation on group

Kingfisher share price rises as RBC lifts valuation on group
Written by:
Tsveta van Son
March 11, 2020

Shares in Kingfisher (LON:KGF) have advanced in today’s trading as RBC Capital has lifted its price target on the company, while maintaining its ‘underperform’ rating on the shares. The move came after the DIY retailer posted a drop in full-year profit last month, and announced that its chief executive Véronique Laury would step down at an unspecified future date.

As 14:46 BST, the Kingfisher share price had added 0.85 percent to 261.70p, outperforming the broader London market, with the benchmark FTSE 100 index currently standing at 7,469.94 points, flat in percentage terms. The group’s shares have given up more than 13 percent of their value over the past year, as compared with about a 3.4-percent gain in the Footsie.

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RBC lifts target for Kingfisher share price

RBC Capital, which rates Kingfisher as an ‘outperform,’ lifted its price target on the shares from 200p to 220p today. Proactive Investors quoted the analysts as commenting that they had increased their “fiscal year 2020-21 pre-tax profit forecasts for Kingfisher by two percent due to stronger than expected industry data for France and the UK recently, helped by strong seasonal sales versus very soft comparisons”.

The FTSE 100 group cautioned last month the outlook by country was ‘mixed’ for the new financial year, with UK market uncertain, and the company “mindful of softer housing market activity in France”.

“We rate Kingfisher ‘underperform’ with a 220p price target as we think it will take time for the performance of Castorama France to improve, plus we see potential for a margin rebase under a new CEO,” the broker pointed out.

Other analysts on do-it-yourself retailer

Jefferies, which is bullish on Kingfisher with a ‘buy’ rating, lowered its valuation on the shares from 400p to 320p last week, while Société Générale downgraded the company to a ‘sell,’ without specifying a price target on the stock. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 241.25p.