Jefferies upgrades Kingfisher to 'buy', raises target price

Jefferies said the retailer's investment attractions had begun to improve given the potential for a positive inflection in its French market share and strong performance in the UK despite cyclical risks led it to give the group a better valuation.

Strong sales from new product ranges underscored that the scale of change at Kingfisher remained "meaningful" but the pitfalls to profit expectations were declining as the roll-out of its new ONE strategy progressed, helped by a much improved B&Q digital offering.

In the UK, the analysts said, "KGF remains vulnerable to UK macro uncertainties. However, these look unlikely to be accompanied by the incremental headwind of a recovering Bunnings."

Jefferies concluded saying that the new 400p price target "presumes investors will be willing to pay a c.13x forward PE (6.6% FCY) a year from now."

As of 1700 GMT, shares had gained 4.57% to 322.60p.