Kingfisher PLC

Kingfisher PLC (LON: KGF) is an FTSE 100 index listed international home improvement company with approximately 1,430 stores.

Investment Rationale – EXPENSIVE at GBX 328.40

• Weak Top-Line Business: The top-line revenue dropped by almost 6.30% during Q3 FY22 when compared with Q3 FY21.
• Trading near 52-week high level: The stock is currently looking overstretched as it is trading near 52-week high level.
• Decline in Free Cash Flow: KGF had shown a significant reduction of around 30.6% in the free cash flow from £1.04 billion for H1 FY21 to £723 million during H1 FY22.
• Unfavourable Technical Indicators: From a technical standpoint, a 20-days exponential moving average of GBX 333.80 indicates a correction in the stock price.
• Moving Average Convergence Divergence: The MACD line remained lower than the signal line, indicating a correction in the stock price.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the weak top-line business during Q3 FY22, overstretched valuation, and unfavourable technical indicators, we have given an “EXPENSIVE” recommendation on Kingfisher PLC at the closing market price of GBX 328.40 (as of 24 November 2021).

*The reference data in this report has been partly sourced from REFINITIV.

*Dividend Yield may vary as per the stock price movement.

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