WH Smith PLC (LSE:SMWH) has “turbulence ahead”, according to analysts at Deutsche Bank, which slashed its target price for the retailer to 1,390p from 1,840p but kept a ‘buy’ rating on the stock.
Ahead of the group’s full-year results, due next month, the German bank's analysts believe the focus will be on current trading trends and the resilience of average transaction value.
Additionally, guidance on the upcoming financial year, given the risk of recession, travel and high street margin performance and the recovery trajectory of the recently acquired Funky Pigeon will be eyed, they added.
“Thoughts around increased competitive intensity in the longer term from Dufry’s acquisition of Autogrill,” will also be something to look out for, the analysts said.
Despite this, WH Smith's full-year sales are expected to grow by 122% compared to 2019, with profitability in line with its estimates of £73mln, the Deutsche Bank analysts concluded.