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Thursday February 12th 2009
City view - WH Smith
Archived article dated Thursday February 12th 2009
Following the recent decline in the share price of WH Smith, Pali has moved its recommendation on the company from 'Neutral' to 'Buy'.
The broker believes the fall, on the back of director share sales, has been overdone and that the current valuation makes it an attractive opportunity for investors. It also suggests WH Smith could be a long-term M&A target. The recent news that the company had become the exclusive operator of airport bookstores is also a positive development.
Pali says the PE of only 8x next year's earnings makes the company cheap compared with the likes of HMV and it therefore feels justified in moving its recommendation to 'Buy' and increasing its price target from 370p to 390p. This compares with an underlying share price of 349.5p.
Tagged as: wh smith | city | pali
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