​​​Kingfisher hopes for housing market improvement ahead of full-year earnings

​​​Kingfisher hopes for housing market improvement ahead of full-year earnings

​The DIY chain owner is facing tough headwinds in France and Poland, but with UK rate cuts now on the horizon, perhaps the situation is improving.

​Kingfisher is set to report its annual earnings for the fiscal year on 25 March. Analyst expectations are that the company's revenue will remain relatively steady at around £1.3 billion for the year. However, pre-tax profits are forecasted to decline to £561 million from £611 million the previous year.

​Investor sentiment toward Kingfisher and the home improvement sector more broadly has been cautious over the past year amid economic headwinds. However, there are some signs that the outlook for the UK housing market is starting to improve, which could bode well for future demand at Kingfisher's B&Q and Screwfix home improvement chains.

​One potential tailwind is the increasing prospect that the Bank of England (BoE) may start cutting interest rates later this year as inflation cools. Lower borrowing costs would help ease the financial pressure on UK homeowners, leaving them with more discretionary income to spend on DIY projects and home renovations.

​That said, Kingfisher is still facing an uphill battle when it comes to managing operating expenses in a high inflation environment. The company's market share also remains under pressure in Poland, which is an important growth market. Investors will be closely watching for any guidance from management on efforts to regain ground overseas.

​Overall, while the upcoming earnings are expected to show some financial pressure compared to last year, there are glimmers of optimism around Kingfisher's future performance if the housing market continues stabilizing and interest rates start to come down. As always, the retailer's ability to control costs and maintain market share will be key to driving profitable growth.

​Analyst ratings for Kingfisher

​LSEG data shows a consensus analyst rating of between ‘hold’ and ‘sell’ for Kingfisher – 2 strong buy, 1 buy, 8 hold and 6 sell - with the mean of estimates suggesting a long-term price target of 229.13 pence for the share, around 2% lower than the current price.

​Technical outlook on the Kingfisher’s share price

​The Kingfisher share price, which is still trading in negative territory by over 2% year-to-date, underperforming the FTSE 100’s near 3% rise this year so far, nonetheless robes key resistance.

​Kingfisher Daily Candlestick Chart

​A rise and daily chart close above the 2021-to-2024 downtrend line and early-March high at 237.0p to 237.9p would put the December peak at 249p on the plate. En route lies the mid-November high at 240.5p.

​Further up sits the April 2023 peak at 264.20p which represents another potential upside target, provided the Kingfisher share price remains above the 55-day simple moving average (SMA) at 223.8p and the late-February and current March lows at 221.4p to 220.6p.

​Were a fall through this support zone to occur, the October-to-March tentative support line at 215p and the November-to-February lows at 212.5p to 209.8p would be back in sight.

​Kingfisher Monthly Candlestick Chart

​Failure at 209.8p on a weekly chart closing basis would have medium-term negative implications and put the October 2022 and October 2023 lows at 198.6p to 198.3p on the map.