As another lockdown looms, is Kingfisher one of the best FTSE 100 shares to buy now?

Boris Johnson is adamant he doesn’t want one. Most of us probably aren’t exactly craving one either. However, yesterday’s worrying statistics on the spread of coronavirus suggest more drastic measures could be around the corner. Including the possibility of a second national lockdown.

This being the case, does it make sense to buy DIY retailer and FTSE 100 stock Kingfisher (LSE: KGF)? Today’s half-year results have certainly led me to modify my view of the company.  

FTSE 100 winner

As expected, the requirement to spend more time at home has proven a great tailwind for the B&Q and Screwfix owner, making it arguably one of the few ‘winners’ from the FTSE 100 over 2020. 

Although sales in Q1 were inevitably hit, the easing of restrictions in Q2 allowed like-for-like sales in the latter to soar 19.5%. Growth was seen in all the company’s operations with the exception of Russia and Iberia.

Unsurprisingly, e-commerce sales boomed. A 164% jump here accounted for 19% of total sales, comparing favourably to the 7% contribution over the same period in the previous year. 

All told, sales fell 1.1% in constant currency over the six month period to the end of July. Statutory pre-tax profit, however, jumped a little over 62% to £398m. Free cash flow also soared over 400% to £1.04bn, partly due to lower capital expenditure. No wonder the shares were up over 7% in early trading. 

But this is the past. What about the future?

Mixed outlook

Today, Kingfisher said that trading in the second half of its financial year so far had been “encouraging” with like-for-like sales up 16.6% to 19 September. As CEO Theirry Garnier stated, the pandemic is “creating new home improvement needs, as people seek new ways to use space or adjust to working from home.”

With suggestions that restrictions could be in place until next spring, this trend looks like it’ll continue for some time to come. Even after being lifted, many of us won’t exactly be sprinting back to the office.

Notwithstanding, the company was keen to state the uncertainty caused by coronavirus limits its ability to provide an outlook on sales for the second half of its financial year. As a result (and in line with other FTSE 100 companies), the interim dividend has been withdrawn and some of the cash has been used to pay down borrowings instead.

Personally, I think this is a great move. Kingfisher’s balance sheet has always been something of a red flag for me. The fact that net debt fell from £2.4bn to £1.4bn by the end of July is pleasing.

Still good value?

Like everything else, shares in Kingfisher plunged back in March when the UK entered lockdown. Since then, they’ve bounced hard. Taking today’s rise into account, they’re now up an incredible 130% since the market crash!

Nevertheless, Kingfisher still doesn’t look excessively priced. A valuation of 14 times forecast earnings before markets opened was pretty reasonable. Of course, the extent to which investors should trust analyst forecasts given the unpredictability of coronavirus is another thing entirely.

For me, however, the deciding factor should be whether you would want to hold the Kingfisher’s shares after the coronavirus has been sent packing. We are, after all, long-term investors here at Fool UK.

If not, there are plenty of other FTSE 100 stocks I’d buy for the long term.