Broker tips: Kingfisher, Booker, Moss Bros

19th May 2011 12:47

Kingfisher, the B&Q and Screwfix owner, should report a strong first quarter, according to UBS, which raises its target price on the DIY retailer by 25p."We expect the first quarter should be another strong showing from Kingfisher, helped by strong seasonal sales in the UK, further momentum in France and strong recovery versus weak comparatives in Poland," the broker said.The broker ups its 2011-12 pre-tax profit forecast by 2% to £768m, while 2012-13 numbers are raised by 5%. The target price now stands at 310p, up from 285p, and a 'buy' rating is maintained. Profits jumped by 20% at cash and carry wholesaler Booker during the year ended 25 March, and while Peel Hunt has raised its profit forecasts for the current year, it cuts the group's rating from a 'buy' to a 'hold'."The company has had a good start to the year, helped by the good weather and extended holidays," said analyst Charles Hall. As a result, the pre-tax profit estimate is increased by 3% to £76m.However, with the shares having continued to perform well, the broker downgrades the rating and suggests "we would wait for a better entry level." A target price of 62p is retained.Broker finnCap says that Moss Bros has the "financial firepower' to withstand a challenging market and to develop its brand format.While the menswear retailer faced tough comparatives in the first quarter with the first 16 weeks of last year showing a like-for-like (LfL) sales growth of 12.6% (this included the recently-offloaded Hugo Boss franchised stores)."Seen in that context, this morning's trading update is impressive. LfL sales for the 15 weeks to 14 May are 8.2% ahead of the equivalent period. Total sales are 12.9% ahead," said analyst David Stoddart.With a improving gross margin and strong cash position, the broker retains its 'buy' recommendation, but raises the target price from 46.7p to 64.9p.---BC