On Thursday, Deutsche Bank analysts adjusted their outlook on WH Smith (SMWH:LN) (OTC:WHTPF), reducing the price target from GBP12.90 to GBP10.50, while keeping a Hold rating on the stock. The revision follows the company’s first-half results, which showed a 12% EBIT growth for its Travel division, based on a 6% increase in like-for-like (Ifl) sales, despite a slight decrease in the number of sites operated.
The report from Deutsche Bank acknowledged that WH Smith’s current trading has been stable, with the exception of the United States where a decline in foot traffic has been observed. However, management has expressed confidence in the increased spend per head at their locations. In light of these findings, Deutsche Bank has chosen to remove the High Street segment from its forecasts beginning in FY26, adjusting the Ifl sales assumption down by 2 percentage points, and accounting for the recent weakness of the US dollar in their analysis.
The analysts concluded that WH Smith’s strategic withdrawal from the High Street has positioned the core business strongly, even though the minimal cash inflow from this exit is expected to dilute earnings per share (EPS), especially during a period of reduced airport footfall. The Hold rating has been maintained as the analysts see the company’s move as sensible and the business fundamentals as solid.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.