Broker snap: Nomura raises Kingfisher price target

18th Sep 2009 12:00

The cost environment for 2010 for DIY retailer Kingfisher looks relatively benign, according to broker Nomura Securities, which should support earnings.The broker reckons increased visibility in respect of Kingfisher’s Polish and Chinese activities indicates ‘the group may be on track for further earnings growth.’Back in the UK, B&Q is expected to continue to take market share. With the group throwing off cash Nomura reckons Kingfisher even has scope to increase the full year dividend.‘However, despite upgrades, the market will continue to look towards the 19.6p management incentive plan and ask `what next`, to drive earnings further,’ reckons Nomura analyst Christopher Walker.The broker has upped its fiscal 09/10 estimates, and now expects full-year profit before tax of £496m and earnings per share of 14.6p, but notes bonus payments may limit further upgrades in the short term.Nomura remains neutral on the stock and the sector but has increased its target price for Kingfisher to 220p.