Kingfisher Raises Profit Guidance After Strong First Quarter; We Moderately Raise Our FVE

We raise our fair value estimate for no-moat Kingfisher to GBX 334 per share from GBX 319 after incorporating a strong first quarter, which saw spending momentum in the home improvement sector persist. First-quarter sales grew 64% year over year, which translates into an impressive 23% increase on a two-year basis, and thus eliminates the impact of weak comparables due to store closures last year. Management raised profit guidance for the full year, despite remaining cautious on trading performance in the second half of the year. Shares remain fairly valued.