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On Wednesday, Deutsche Bank (ETR:DBKGn)’s analyst Adam Cochrane increased the price target on Kingfisher Plc (LON:KGF:LN) (OTC:KGFHY) to GBP3.30, up from GBP3.05, while reiterating a Buy rating on the stock. Cochrane’s revision reflects a more optimistic forecast for the company’s full-year profit before tax (PBT) due to a stronger outlook for the UK market.
The analyst anticipates that Kingfisher will raise its full-year guidance range when it reports first-quarter results on May 28, influenced by recent positive data from the UK and favorable weather conditions. The expected new guidance range is GBP500 million to GBP560 million, an increase from the previous GBP480 million to GBP540 million. This adjustment corresponds to a forecasted mid-point increase of approximately 4% to GBP530 million.
Cochrane’s analysis suggests a significant uplift in UK like-for-like (LFL) sales, projecting a 5.5% increase compared to the earlier estimate of 2%, which is also higher than the consensus of 1%. While acknowledging potential upside risks for the remainder of the year, the analyst has chosen to maintain the existing forecasts for the second to fourth quarters.
Looking further ahead, Deutsche Bank’s projections for Kingfisher’s profit before tax in future years have also been adjusted. The forecast for fiscal year 2026 has been raised by 5% to GBP550 million, and for fiscal year 2027, the estimate has been increased by 4% to GBP637 million. The valuation method remains unchanged, based on 12 times the projected earnings for fiscal year 2027, leading to the revised price target of 330 pence. The analyst’s endorsement of the Buy rating is reaffirmed alongside the new price target.
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