RBC Capital Markets has weighed in on Kingfisher’s (LON:KGF) latest results, arguing that the retailer, which lost out on sales due to the ‘Beast from the East’ snow, is unlikely to recover all of the seasonal weakness later in the year, WebFG News reports. The comments came after the do-it-yourself retailer updated investors on its quarterly performance yesterday.
Kingfisher’s share price, which was volatile in the previous session, has jumped this morning, having added 4.11 percent to 309.10p as of 10:26 BST. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.30 percent higher at 7,739.77 points.
RBC weighs in on Kingfisher’s quarterly results
RBC Capital Markets, which rates Kingfisher as a ‘market perform’ with a price target of 315p on the shares, commented yesterday that the group’s quarterly update had been softer-than-expected, forecasting that the first-quarter disappointment will lead to consensus PBT downgrades in the order of two-three percent. The DIY retailer posted a four-percent fall in like-for-like sales, with snow disruption in major markets estimated to have accounted for three percentage points of the decline.
“Major competitors Wickes and Bunnings have their own company-specific challenges but even so as market leader we don’t think Kingfisher will be immune from this trend,” the broker’s analysts commented, as quoted by WebFG News.
UK weakness partly overset by international exposure
The analysts, however, noted that while they were “concerned about ongoing disruption and execution risk with the transformation plan, and market expectations medium term,” the also thought “the story could improve again as France online improvement comes through in the summer and as we should see some capacity withdrawal in the UK”.