B&Q owner Kingfisher PLC (LSE:KGF) had been upgraded to "Buy", from "Neutral," by analysts at Citi as the American bank’s team expects the DIY market to improve in the coming months.
Citi set a new price target at 258p, up from 210p, suggesting some 14% upside to the retailer’s current price of 226.4p.
The analysts are optimistic about Kingfisher's positioning for an anticipated recovery in the UK housing market.
Despite cautious investor sentiment ahead of the FY24 results, Citi suggests the possibility of nearing the end of the current downgrade cycle, bolstered by encouraging web traffic trends indicating market share resilience.
"With nearly 75% of group earnings driven by the UK, we expect the group to benefit from a UK housing market recovery,” the Citi team said in a note.
Citi's revised price target considers an improving macroeconomic backdrop and the impact of ongoing share buyback initiatives, suggesting a favourable outlook for Kingfisher's stock in the medium term.
Elsewhere, however, analyst at Jefferies today downgraded the DIY retail share from ‘Buy’, to ‘Hold’, whilst pitching a new price target of 210p.
At Jefferies, the caution comes in France where analysts see “persisting macro headwinds to weigh on Kingfisher's growth”.
The UK and Poland based operations are benefiting from “growth tailwind” but Jefferies reckons that progress will be held back due to the French business.
“We expect limited topline and profit growth in FY25e for the group, driven by UK trade banners and Castorama Poland, offset by challenges in France and a weak macro backdrop,” the Jefferies analysts said in a note.