Kingfisher PLC (LSE:KGF) has scope to pay higher cash returns to shareholders, said RBC Capital Markets.
Given its depressed share price, the broker said upping its cash returns would "make sense".
Considering the home improvement company was trading around 75% of book value, analysts said following the £300mln buyback completed on 28 April, would be a “very sensible use of cash”.
A similar buyback to the last one would be approximately 5% accretive to consensus earnings per share, RBC commented as it reiterated its ‘outperform’ rating.
In Kingfisher’s full-year results on 22 March, it revealed it was comfortable with the full-year 2023 consensus forecast of £769mln, though the average forecast has now drifted £30mln lower.
The company should prosper from the outperformance of Screwfix and trade related areas, plus recent share gains in Poland and Russia, the analysts believe.
Despite the mostly positive note, its shares eased 1.1% lower to 252p on Monday afternoon.