​​​Kingfisher share price at 15-month high ahead of 21 May trading update

​​​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.