Tough outlook for Kingfisher as DIY spending remains pressured
DIY spending remains muted across Kingfisher’s key markets, while competition from its rivals remains stiff.
DIY spending remains muted across Kingfisher’s key markets
Kingfisher will release its financial results for the third quarter (Q3) of 2023 on 22 November. However, the company's shares have recently hit a 52-week low, due to caution around a decline in credit card spending this year and inflationary pressures.
Kingfisher is facing challenges in its key markets, including a reversal in UK demand, stiff competition in France, and difficult conditions in Poland.
The lower expectations for Kingfisher's financial performance are influenced by the performance of Wickes, which reported moderately lower sales compared to the previous year, and Travis Perkins, which recently highlighted a slowdown in new build housing and domestic repairs.
In addition to the challenges in the UK, Kingfisher is also encountering stiff competition in France, where rival Leroy Merlin, is regaining strength. The company is also facing a challenging outlook in Poland. France accounted for 34% of Kingfisher's market sales in 2022, while Poland comprised 13%.
Analyst ratings for Kingfisher
Refinitiv data shows a consensus analyst rating of ‘hold’ for Kingfisher – 2 strong buy, 2 buy, 7 hold, 6 sell and 1 strong sell - with the mean of estimates suggesting a long-term price target of 232.38 pence for the share. It is where the share is trading as of 20 November 2023.
Technical outlook on the Kingfisher’s share price
The Kingfisher share price, which dropped by 3% year-to-date, underperforming the FTSE 100’s 1% fall this year so far, despite rising by 16% from its late October low at 198.30 pence.
Bulls would like to see the Kingfisher share price rise not only above last week’s three-month high at 240.5p but also above the 200-day simple moving average (SMA) at 241.5p on a daily chart closing basis. If so, the July peak at 255.20p would be back in focus.
Kingfisher Daily Candlestick Chart
Further up sits the April peak at 264.20p which represents another potential upside target, provided the Kingfisher share price remains above the 55-day SMA at 218.50p and the 8 November low at 215.60p. It was made around the July low and 10 October high and is thus technically of significance.
Kingfisher Weekly Candlestick Chart
It is unlikely that the Kingfisher share price will give back its recent four weeks of straight gains, having bounced off the October 2022 low at 198.60p. If it and this year’s October low at 198.30p were to be slipped through, though, the August and September 2019 lows at 186.20p to 186.15p would be on the plate.
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