Kingfisher share price at 15-month high ahead of 21 May trading update
The upcoming trading statement from Kingfisher has a lot riding on it, given the large rally in the share price in recent weeks.
Kingfisher share price at 15-month high ahead of 21 May trading update
The upcoming trading statement from Kingfisher has a lot riding on it, given the large rally in the share price in recent weeks.
Kingfisher, the owner of popular DIY/home improvement brands like Screwfix and B&Q, has faced challenges in maintaining its earnings since 2020 due to economic headwinds such as the cost-of-living crisis, which has impacted consumer spending. However, there are indications that better economic conditions may lie ahead for the company.
City analysts have forecasted a rebound of around 17% in Kingfisher's normalised earnings by the 2026 trading year, suggesting a potential turnaround in the company's financial performance. In the recent full-year results report, the management sounded optimistic about the business's prospects, stating that Kingfisher is "strongly positioned" for growth from 2025 onwards. This optimism stems from the company's efforts to reduce costs and capitalise on multiple growth drivers in its markets.
Despite the cautionary outlook for 2024 expressed by the management, the stock market is likely to look beyond the near-term challenges and focus on Kingfisher's longer-term growth prospects beyond 2024. This forward-looking approach could potentially benefit the company's share price.
Currently trading at around 261p, Kingfisher's valuation appears attractive, with a forward price-to-earnings (P/E) ratio of just over 10 for the next year. This valuation compares favourably to the median P/E ratio of around 14 for the FTSE 100 index, indicating that the company's shares may be undervalued relative to its peers, especially when the 4.7% dividend yield is thrown in to the mix.
Analyst ratings for Kingfisher
LSEG Data & Analytics data shows a consensus analyst rating of between ‘hold’ and ‘sell’ for Kingfisher – 2 strong buy, 2 buy, 7 hold and 4 sell - with the mean of estimates suggesting a long-term price target of 246.38 pence for the share, around 6% lower than the current price.
Technical outlook on the Kingfisher’s share price
The Kingfisher share price, which is now trading nearly 10% in positive territory year-to-date, marginally outperforming the FTSE 100’s advance, remains on a medium-term upward trajectory despite a short-term pullback.
While the April low at 239.8p holds, medium-term upside pressure should remain intact.
Kingfisher Daily Candlestick Chart
A rise and daily chart close above the current May high at 274.0p would put the March peak at 294.8p back on the cards.
Kingfisher Monthly Candlestick Chart
Were a fall through the April low at 239.8p to be seen, though, the 200-day simple moving average (SMA) at 229.6p would be back in the frame, as well as the October-to-May tentative support line at 221.80p. Further down sit the November-to-February lows at 212.5p to 209.8p.
Only currently unexpected failure at the 209.8p level 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.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
