B&Q owner Kingfisher has been downgraded to ‘sell’ by UBS after the bank predicted the international home-improvement company will be hit by a slump in consumer spending and lose market share in the UK.
The Swiss lender said that spending was slowing compared with the high demand the sector experienced during the pandemic.
The bank said it expected hardware store Screwfix, another Kingfisher subsidiary, “to continue to underperform” compared to rival Toolstation in the medium term in what it said was already a tough and mature market.
“We estimate that Kingfisher will lose market share in the UK in the medium term, driven by increasing competitive intensity, softened outlook for the industry, and pullback in discretionary spend,” UBS said in an investor note late Friday.
“Our analysis suggests that Kingfisher will underperform on key sales and operating metrics relative to European and US peers, which could weigh on its valuation in the near to medium term,” the bank said.
Kingfisher declined to comment.