- Kingfisher
- 20 May 2025 10:03:06
Source: Sharecast
The bank noted that Kingfisher is due to report first-quarter sales on 28 May and said its forecast is for a group like-for-like sales decline of 0.4%, equivalent to a modest 0.4% increase excluding calendar impact.
"This would be the first quarter in quite some time for Kingfisher to register underlying LFL improvement," it said. "Having said this, we doubt that Kingfisher will look to change its FY25/26 guidance for PBT (£480-540m) or free cash flow (£420-480m) at this relatively early stage in the year."
Barclays said that despite expecting an improved top line performance from Kingfisher, it is downgrading the stock as it feels the better sales growth that it expects from B&Q in Q1 is likely to be largely weather-driven and not something that it would want to extrapolate forwards.
In addition, Barclays said it still expects the French business to be in clear LFL sales decline in Q1 and that the market data offers little obvious room for encouragement on the local industry dynamics.
The bank also said it does not expect Screwfix to have benefited greatly from the weather in the first quarter, given its specialist customer base. It said that having got close to its target of more than 1,000 stores in the UK/Ireland (now at 952), it is expecting Screwfix's sales trends to moderate.
"We now forecast sales growth of 12% in the last decade. It is too early to have confidence in the outlook for Screwfix France - in fact we have been underwhelmed by the pace of store openings," it said.
Looking at its General Retail coverage, Barclays said it sees better value opportunities at B&M European Value Retail, which is rated ‘overweight’ with a 400p price target and Marks & Spencer, which is also ‘overweight, but with a 430p price target.
Barclays said it sees Next and Inditex - both of which are ‘equalweight’ - as offering more reliable growth opportunities.
The bank lifted its price target on Kingfisher to 280p from 275p due to small, FX-driven estimate changes.
At 1000 BST, Kingfisher shares were down 1.2% at 309.70p.
