Shares of British retail company Kingfisher PLC (GB:KGF) fell 1.3% as of writing after Barclays analyst James Anstead downgraded his rating from Buy to Hold. However, Anstead maintained his price target of 300p for KGF stock, indicating 7% upside potential.
Kingfisher PLC is a retail company that provides home improvement and décor products under brands like B&Q, Castorama, Screwfix, and TradePoint.
Barclays Lowers KGF’s Rating to Hold
Anstead’s downgrade of KGF’s rating to Hold reflects a near-term slowdown in the company’s earnings growth. However, the analyst is confident about management’s medium-term strategy to revamp the company’s French business. The company is advancing on its plan to enhance its performance in France after it completed its structural simplification.
Additionally, Anstead believes Kingfisher could generate higher profit growth in its key markets in the medium term if macroeconomic conditions improve and the company performs effectively.
Overall, Barclays expects KGF to report a 3.5% decline in Q2 LFL (like-for-like) sales and a 17% drop in PBT (profit before tax) to £280 million.
Kingfisher will announce its half-yearly results on September 17, 2024.
Kingfisher Stays Firm on Guidance Despite Sales Slump
For the first quarter of FY24/25, Kingfisher reported a 0.9% decline in its LFL sales. The company also witnessed sluggish sales trends continuing into the second quarter. LFL sales fell 2.5% in the three weeks ending May 18, 2024.
Despite this, Kingfisher maintained its guidance for the full year. The company expects its adjusted profit before tax for FY24/25 to fall between £490 million and £550 million, a decrease from the £568 million reported in FY23/24. Free cash flow is expected to be approximately £350 million to £410 million, compared to £514 million in the prior fiscal year.
What Is the Share Price Target for Kingfisher?
On TipRanks, KGF stock has received a Hold consensus rating based on one Buy, two Holds, and one Sell recommendation. The Kingfisher share price target is 284p, which implies a modest upside potential of 1.32% in the share price.
