Citi downgrades Kingfisher to ‘neutral’
Kingfisher
284.10p
16:40 13/09/24
Citi downgraded Kingfisher to ‘neutral’ from ‘buy’ on Wednesday as it cited limited scope for near-term upgrades.
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The bank noted the shares have had a good run, up around 32% from their February lows, supported by an improving macro backdrop in the UK and Poland, as well as ongoing share buybacks.
"While we continue to see scope for stronger UK outlook on the back of healthy consumer sentiment trends and higher housing market activity in FY 2025/26e, we move neutral here as we see limited upside risks to estimates amidst ongoing weakness in France and incrementally lacklustre consumer sentiment trends in Poland," the bank said.
"Stock trades on P/E of 14x, EV/EBIT of 11.7x and EV/Sales of 0.56x on our FY25e estimates and we see limited upside to current valuation near term."
In the medium term, Citi said improvements to French profitability and higher trade penetration across the group should see a structural re-rating driven by higher returns.
Citi kept its price target on the stock unchanged at 292p.
At 0930 BST, the shares were down 1.7% at 281.80p.