There’s life in the old DIY dog yet. RBC Capital has upgraded Kingfisher PLC (LSE:KGF) to 'outperform', nudging its price target up from 320p to 350p.
That implies a tidy 16% upside from the current price, as the bank argues that the owner of B&Q and Screwfix has more growth potential left in its toolkit than the market gives it credit for.
RBC’s analysts think Kingfisher’s prospects in the UK and Poland more than make up for its French headaches.
Their “store potential” analysis, a data-heavy exercise using mapping and demographics, points to further room for expansion in both markets.
The UK looks largely built out, but there’s scope for smaller urban B&Q formats and more Screwfix outlets. In Poland, where the group is already as profitable as it is in France, the analysts see headroom for another 34 Castorama stores, helped by falling interest rates and improving consumer confidence.
Margins are also looking healthier. Gross margin improved by a full percentage point in the first half, helped by better buying, a growing private-label mix and the higher-margin marketplace business.
RBC reckons initiatives such as retail media, selling advertising space to suppliers, and smarter markdown management using artificial intelligence should support that progress.
Back home, Kingfisher’s UK arm remains the star. DIY has held up well as consumers look for cheaper ways to spruce up homes rather than move.
Trade customers, too, are buying more through Screwfix and B&Q’s TradePoint, and the latter’s online marketplace is bringing in new shoppers who go on to buy own-brand products.
France remains trickier. The Castorama and Brico Dépôt chains are up against fierce competition and cautious consumers, though management is pushing efficiency gains, store franchising and a sharper online offer.
At 12 times 2026 earnings and with a 4% dividend yield, the shares look reasonably priced for a company expected to deliver low double-digit earnings growth.
Kingfisher has long struggled to keep investors interested, but with cash generation strong and a £300m buyback underway, it may finally be hammering together a sturdier case for itself.
The shares were up 1.3p to 31.5p.