Earnings Miss: Kingfisher plc Missed EPS By 17% And Analysts Are Revising Their Forecasts

Shareholders of Kingfisher plc (LON:KGF) will be pleased this week, given that the stock price is up 11% to UK£2.50 following its latest yearly results. It was not a great result overall. While revenues of UK£13b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 17% to hit UK£0.18 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Kingfisher

Following last week's earnings report, Kingfisher's 13 analysts are forecasting 2025 revenues to be UK£13.0b, approximately in line with the last 12 months. Per-share earnings are expected to jump 38% to UK£0.25. In the lead-up to this report, the analysts had been modelling revenues of UK£13.2b and earnings per share (EPS) of UK£0.23 in 2025. So the consensus seems to have become somewhat more optimistic on Kingfisher's earnings potential following these results.

There's been no major changes to the consensus price target of UK£2.31, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Kingfisher at UK£3.00 per share, while the most bearish prices it at UK£1.80. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Kingfisher shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.06% by the end of 2025. This indicates a significant reduction from annual growth of 3.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.4% per year. It's pretty clear that Kingfisher's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kingfisher's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at UK£2.31, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Kingfisher analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Kingfisher that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.