Kingfisher plc - strategy yielding results; outlook prudently cautious
Kingfisher’s better than expected H126 results reflect the success of its trade and e-commerce growth initiatives along with increased big-ticket spending in Q2. Although management has raised FY26E Adj. PBT and free cashflow guidance, there is a degree of macro-economic caution embedded into implied H226 profits. We raise Adj. EPS by 6% for FY26E and 2% for FY27E and see scope for further upgrades if sales trends continue to improve. We raise our FV from 355p to 365p, equivalent to 14x cal 2026 PER and a c.3.5% dividend yield.Although Kingfisher’s share price has regained some of its recent weakness it still trades on c.11x cal 2026 PER which we think undervalues the group’s growth potential and cash-generative appeal.
Kingfisher supplies home improvement products and services through a network of retail stores and other channels, located mainly in the U.K. and continental Europe. As of Jan 31 2017, Co. had nearly 1,200 stores in 10 countries across Europe.
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