Market share wins and cyclical upside appeal
Kingfisher is primed, ready for a recovery in “big-ticket” spending. However, management’s understandably cautious guidance range for FY26E Adj. PBT has led the stock to give up its YTD gains. We believe this enhances Kingfisher’s value attractions.Kingfisher’s FY25 results illustrated that management’s strategy to grow trade penetration and e-commerce sales is driving market share gains in the UK & Ireland, France and Poland.
Over the next three years we forecast c.36% growth in Adj. PBT and our upside scenario suggests c.90% potential growth. Whilst investors wait for this, we forecast a 10.5% FCF yield and substantial cash returns.
Hence, trading on under 9 x cal 2026 PER, we see scope for a significant re-rating. We reiterate our 340p Fair Value, equal to c.12.5x cal 2026 PER and c.3.5% dividend yield.
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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