Shares in Kingfisher [LON:KGF] have been encountering some resistance lately, translating into a poorer showing for its short term technicals. Stock is up over 13% in the last six months, but the retailing company, which owns the likes of B&Q and Screwfix, has seen shares sold off as it approaches its next set of numbers this week.
Quarterly financials have not been looking so good. Numbers reported in July say YoY revenue off 4.11%, net income down 32.91% and diluted EPS off by 30.77%. Bridgewise is rating the stock a Hold and its overall balance sheet at 64/100 against a sector average of 75/100. Cash flow could also be a cause for concern going forward, as the company scored 58/1100 in its last numbers, against 64/100 for the sector.
We have not seen an awful lot of significant news coming out of Kingfisher of late. Last year it reported it was repurchasing 71m shares for around GBP 180m which certainly provided the shares with some momentum. Investors are, however, going to want to hear a little more about how the company is planning to cope with the current inflationary situation in the UK, especially in terms of materials costs, but also as households trim their spending budgets.
Kingfisher currently has a PE ratio of 8.5 and an EBITA margin of 8.33%. It reported a decline in its price to book value of 17% in its last set of numbers. Cash and equivalents are down 40% and this is also going to be an area of some focus. Brokers seem split on the stock, with a forecast price range of between 350p and 165p. The average is around 266p. Shares were trading at 270p at time of writing.
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