WH Smith (SMWH)

Sector:

Retailers

Index:

FTSE 250

1,612.50p
   
  • Change Today:
      17.50p
  • 52 Week High: 1,805.50
  • 52 Week Low: 1,311.00
  • Currency: UK Pounds
  • Shares Issued: 130.91m
  • Volume: 386,162
  • Market Cap: £2,110.92m
  • RiskGrade: 324

Berenberg upgrades Restaurant Group, downgrades Wetherspoons

By Michele Maatouk

Date: Thursday 06 Jan 2022

LONDON (ShareCast) - (Sharecast News) - Berenberg reviewed its ratings on a number of leisure stocks on Thursday from pubs to restaurants and travel firms.
The bank downgraded JD Wetherspoon to 'hold' from 'buy' and cut the price target to 1,050p from 1,650p. It also downgraded On the Beach to 'hold' from 'buy' and reduced the price target to 320p from 400p.

Berenberg said it still thinks Wetherspoons is a very well-run business with a significantly differentiated value offer. "However, we think it could be a while before the type of sales momentum needed to drive a meaningful re-rating from its already sector-leading valuation multiples returns to the business.

"As a result, we downgrade our rating to hold but continue to fundamentally like the shares in the event of any significant pullbacks."

As far as OTB is concerned, Berenberg said it has admired the stock since 2016 and still believes in the business model. "However, we feel the recent lack of clarity on margins in the upcoming years creates too much risk to earnings estimates, particularly with the shares trading at c17x 2023E P/E (including full credit for a rebound in margins). As a result, with the shares having rallied circa 40% in the past month, we downgrade."

Wagamama owner Restaurant Group was upped to 'buy' from 'hold' with an increased price target of 125p from 110p, while WH Smith also received the same rating upgrade, with a price target hike to 1,900p from 1,750p.

Berenberg said it has been warming up to Restaurant Group "for a while now", and with the shares around 30% off last year's highs, now is the time to upgrade the recommendation. "With the right management now instated, we think that the company can grow earnings per share at a double-digit rate for the foreseeable future, believe there is scope for upside to our recovered earnings estimates in 2023 and beyond, and envisage the business being the market leader and natural consolidator over the medium term."

The bank said it has always seen WH Smith as a great business that generates excellent returns on capital and there is no reason why it cannot continue to replicate that in the future. "With the shares down around 25% from last year's highs, we upgrade our rating to buy," it said.

Berenberg's top mid-cap pick is National Express, while its top small-cap pick is Hollywood Bowl, both of which it rates at 'buy'.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

WH Smith Market Data

Currency UK Pounds
Share Price 1,612.50p
Change Today 17.50p
% Change 1.10 %
52 Week High 1,805.50
52 Week Low 1,311.00
Volume 386,162
Shares Issued 130.91m
Market Cap £2,110.92m
RiskGrade 324

WH Smith Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
92.69% below the market average92.69% below the market average92.69% below the market average92.69% below the market average92.69% below the market average
87.23% below the sector average87.23% below the sector average87.23% below the sector average87.23% below the sector average87.23% below the sector average
Price Trend
59.73% above the market average59.73% above the market average59.73% above the market average59.73% above the market average59.73% above the market average
61.54% above the sector average61.54% above the sector average61.54% above the sector average61.54% above the sector average61.54% above the sector average
Income
72.49% below the market average72.49% below the market average72.49% below the market average72.49% below the market average72.49% below the market average
66.67% below the sector average66.67% below the sector average66.67% below the sector average66.67% below the sector average66.67% below the sector average
Growth
57.92% below the market average57.92% below the market average57.92% below the market average57.92% below the market average57.92% below the market average
60% below the sector average60% below the sector average60% below the sector average60% below the sector average60% below the sector average

What The Brokers Say

Strong Buy 9
Buy 1
Neutral 1
Sell 0
Strong Sell 0
Total 11
strong_buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

WH Smith Dividends

  Latest Previous
  Final Interim
Ex-Div 09-Jan-20 11-Jul-19
Paid 30-Jan-20 01-Aug-19
Amount 41.00p 17.20p

Trades for 27-May-2022

Time Volume / Share Price
16:35 59,341 @ 1,612.50p
16:29 6 @ 1,600.50p
16:29 6 @ 1,600.50p
16:29 1,006 @ 1,600.50p
16:29 23 @ 1,600.50p

WH Smith Key Personnel

Chair Henry Staunton

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