Analysts at RBC Capital have raised their target price for Kingfisher PLC (LON:KGF) to 335p from 325p in a UK retail review, with the stock their preferred sector play thanks to the B&Q DIY firm's exposure to the homeware market post-coronavirus lockdown.
“We remain bullish on home-related retail given consumers are spending more time at home, given increased wear and tear, and as we expect consumers to continue to invest in their homes as a store of value, and to improve their standard of living,” the RBC analysts said in the note to clients.
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They added on Kingfisher: "We thought Lowe's results last week were a positive read-across, both in terms of its DIY outperformance, and how recent operational and IT improvements have allowed it to handle a recent spike in sales volumes. We also note encouraging sales trends in France, which has caused us to increase our already high PBT forecasts slightly, and our price target".
Elsewhere in the sector, the RBC analysts also raised their target price for Frasers Group PLC (LON:FRAS) to 325p from 250p following a recent update from Mike Ashley's high street empire, with full-year underlying earnings forecast to be stronger than expected, although they retained an ‘underperform’ rating on the stock
But WH Smith PLC (LON:SMWH) had its target price trimmed to 1,250p from 1,400p due to the slow recovery in the key Travel sector from the coronavirus pandemic.
Shares in WH Smith rose 3% to 1,044p, Frasers Group added 1% to 349.4p, while Kingfisher was flat at 273p on Tuesday morning.