Broker snap: Focus demise to benefit Kingfisher

1st Jun 2011 12:53

Matrix has hiked up its target price for B&Q owner Kingfisher ahead of its first quarter results, seeing more upside to come despite the recent share price run.The broker said that the first quarter figures themselves should be strong but notes that they are probably factored into the current share price."What is not in the price, we believe, is the upside potential from the demise of Focus," said analyst Tom Gadsby.He says that the 31 ex-Focus stores acquired by Kingfisher in early May would add 2% to B&Q sales, "offsetting the headwinds form the inevitable fire sales that Focus will hold."With a further 3% of capacity exiting the market, the broker thinks it should take the pressure off price and be positive for margins across the board.The target price now stands at 325p (from 268p), and a 'buy' is kept.---BC