JP Morgan has retained its 'overweight' rating on WH Smith PLC (LSE:SMWH), the travel retailer, setting out a multi-year recovery scenario with more than 100% potential share price upside as executive chairman Leo Quinn applies a restructuring playbook similar to that used at Balfour Beatty.
WH Smith's shares have fallen 70% over the past 18 months against an 18% rise for the FTSE 250, following years of aggressive organic and acquisition-led growth that culminated in weaker profitability and an accounting restatement in the US in 2025.
JPM analyst Harry Gowers said the group is pivoting away from growth towards returns, focusing on three areas: store portfolio rationalisation, cost reduction and cash generation.
Quinn oversaw a tripling of Balfour Beatty's share price during his tenure as chief executive from 2015 to 2025, alongside an improvement in profit and free cash flow.
JPM sees scope for a similar recovery at WH Smith. Free cash flow generation has been zero recently, but the bank identifies multiple levers beyond profit improvement, including working capital, capital expenditure and one-off cash items, to drive a recovery in the medium term.
WH Smith trades on around nine times 2027 earnings estimates, compared with a 15 times average between 2010 and 2019 and close to the trough multiples seen during the financial crisis.
JPM's December 2027 price target of 575p, implying around 50% upside from current levels, is unchanged.
The bank did flag uncertainty around near-term earnings given weaker air passenger volumes in the UK and US and the ongoing restructuring of the business.
