The Kingfisher share price rallied by more than 4% after the company released the relatively strong earnings. The KGF stock is trading at 324p, which was 25% above the February low of 260p.
What happened: Kingfisher, the leading operator of home furnishing stores in the UK, reported relatively strong earnings today. The company owns more than 1,368 stores, with its brands including B&Q, Castorama, Brico Depot, Screwfix, and Koctas.
The firm said that its revenue rose by 7% to 12.3 billion last year as demand for do-it-yourself products continued to rise. Its pre-tax profits increased by 44% to 756 million pounds. It also announced that it will offer a dividend of 8.25p per share.
With most people working from home, demand for furnishing products has been rising. Indeed, in the United States, companies like Home Depot and Lowe’s also reported strong sales.
Still, the challenge for Kingfisher is whether this demand will keep rising this year. While the management expects the demand to moderate, it expects the ongoing shift to remain.
“while the exceptional demand we have seen over the past year may moderate as vaccines are rolled out and restrictions for our customers become less prevalent, the Covid crisis has established longer-term trends that are clearly supportive for our industry”.
Kingfisher share price forecast
The Kingfisher share price has been on a strong uptrend recently. It has risen by more than 225% from its lowest level last year. On the daily chart, we see that the stock found a strong support at 260p a few weeks ago. The shares also seems to have formed a pattern that seems like a cup and handle pattern.
Therefore, in my view, the overall trend remains bullish in the near term. This will likely see it rise to 350p, However, we should also expect some consolidation or pullback as the stock forms the handle section of the head and shoulders.
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