Broker snap: Tough trading ahead for Kingfisher

2nd Jun 2011 11:12

Prime Markets has confirmed a 'sell' recommendation and target price of 248p for B&Q owner Kingfisher, saying that the shares have climbed "too far too quickly" over the last couple of months.On Thursday, the DIY retailer reported that retail profits grew 19.1% on sales up 3.3% during the 13 weeks to April 30, boosted by good weather, a later Easter and more public holidays."Whilst we have got off to a good start, it remains our view that this year is likely to be a tough one for all retailers, especially in the UK," said Kingfisher's chief executive officer (CEO) Ian Cheshire.Prime Markets' head of dealing Richard Curr notes that "Kingfisher shares have enjoyed an exceptional run since the full year results at the end of March.""By the CEO's own admission, the year ahead is expected to be a tough one for all retailers, and while the group remains focussed on the self-help programme to deliver a solid full year result, no one is under any illusions that the year will be tough, with a real risk of a trading tail-off toward the end of the summer.The broker said it remains a seller at least until trading results later in the year can sustain a currently-high valuation.---BC