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Kingfisher PLC ADR KGFHY

Morningstar Rating
$5.77 +0.19 (3.31%)
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Company Report

Kingfisher: Lowers Guidance Once Again Amid Weak Sales

No-moat Kingfisher reported a 4% decline in organic sales during the third quarter, notably lower than company-compiled consensus of negative 2%. Its French businesses were the main cause for the weak performance, seeing the top line fall 9%, partly explained by an unfavorable product mix, which was not geared for the unusually warmer weather during the quarter. Full-year profit-before-tax guidance was lowered to GBP 560 million from GBP 590 million, having been downgraded from GBP 630 million during the previous quarter. Its second profit warning in as many quarters highlights the weak macroeconomic environment in Europe and that demand continues to normalize, having benefited significantly during the coronavirus pandemic and thus we don't anticipate a meaningful recovery in the short term. Investor confidence in the business has declined with shares trading 6% lower. We maintain our GBP 2.90 fair value estimate and view shares as undervalued at current levels.

Price vs Fair Value

KGFHY is trading at a 23% discount.
Price
$5.59
Fair Value
$7.20
Uncertainty
Medium
1-Star Price
$1.12
5-Star Price
$4.52
Economic Moat
Cdjth
Capital Allocation
Vvbwxkx

Bulls Say, Bears Say

Bulls

Demand for Kingfisher’s home improvement products stands to benefit from aging housing stock in the U.K. and France, as well as energy and water-saving products.

Bears

Higher interest rates and a deteriorating macroeconomic picture has lowered demand for home improvement products, requiring promotional activities to drive sales.

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News

Trading Information

Previous Close Price
$5.59
Day Range
$5.405.79
52-Week Range
$4.807.05
Bid/Ask
$5.22 / $6.30
Market Cap
$5.43 Bil
Volume/Avg
115,886 / 257,834

Key Statistics

Price/Earnings (Normalized)
9.25
Price/Sales
0.34
Dividend Yield
5.60%
Dividend Yield (Forward)
5.60%
Total Yield
10.44%

Company Profile

Kingfisher is a home improvement company with over 1,570 stores in eight countries across Europe. The company operates several retail banners that are focused on trade customers and general do-it-yourself needs. Kingfisher’s main retail brands include B&Q, Screwfix, and TradePoint in the United Kingdom and Castorama and Brico Depot in France. The U.K. and France are Kingfisher’s largest markets, accounting for 81% of sales. The company is the second-largest DIY retailer in Europe, with a leading position in the U.K. and a number-two position in France.
Sector
Consumer Cyclical
Industry
Home Improvement Retail
Stock Style Box
Mid Value
Total Number of Employees
77,701

Competitors

Valuation

Metric
KGFHY
LOW
HD
Price/Earnings (Normalized)
9.2514.7020.12
Price/Book Value
0.62218.35
Price/Sales
0.341.302.06
Price/Cash Flow
4.0511.0316.12
Price/Earnings
KGFHY
LOW
HD

Financial Strength

Metric
KGFHY
LOW
HD
Quick Ratio
0.250.070.25
Current Ratio
1.261.211.30
Interest Coverage
4.377.9911.85
Quick Ratio
KGFHY
LOW
HD

Profitability

Metric
KGFHY
LOW
HD
Return on Assets (Normalized)
3.83%18.17%20.95%
Return on Equity (Normalized)
7.01%1,335.72%
Return on Invested Capital (Normalized)
5.98%36.37%34.03%
Return on Assets
KGFHY
LOW
HD

Home Improvement Retail Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
HD
The Home Depot IncXbrl$312.0 Bil
LOW
Lowe's Companies IncDjzr$114.3 Bil
WFAFY
Wesfarmers Ltd ADRRtbpdy$39.5 Bil
WFAFF
Wesfarmers LtdDthsvvy$39.5 Bil
FND
Floor & Decor Holdings Inc Class AZtjbjcb$9.8 Bil
KGFHF
Kingfisher PLCTvkym$5.2 Bil
HPCRF
Home Product Center PCL Shs Foreign registeredGvjbx$4.5 Bil
FKRAF
Fiskars OyjNkcb$1.5 Bil
ARHS
Arhaus Inc Class AHsjx$1.3 Bil