WH Smith (LON: SMWH) shares jumped last week, closing 5% higher on Thursday and gaining a further 1% on Friday after it released its preliminary results for the year ended August 31.
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The company revealed a return to profitability which slightly beat market expectations as the travel rebound boosted sales. The company said travel revenue in 10 week period to November 5 was at 148% of 2019 levels.
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Overall, the group reported a profit before tax of £73 million, above expectations, while it reinstated its dividend, paying a final dividend of 9.1p per share.
“2022 has been a successful year for WHSmith and we enter the new financial year with the Group in its strongest ever position as a global travel retailer with multiple growth opportunities across the world,” said Carl Cowling, WH Smith Chief Executive
Despite the positive release, JPMorgan analyst Harry Gowers reduced the firm’s price target on WH Smith to 1,900p from 1,930p on Friday, keeping an Overweight rating on the shares. Back in May, Gowers upgraded WH Smith to the current Overweight rating, telling investors the company is a “fundamentally a higher-quality business” compared to pre-COVID.
Meanwhile, Barclays analyst Richard Taylor cut his firm’s price target on WH Smith shares to 1,975p from 2,180p, maintaining an Overweight rating.
According to TipRanks, out of five analysts with ratings on the stock, all have a Buy rating, with the average price target at 1,833p, representing a potential 32.2% upside.
WH Smith shares are down 9% so far in 2022.
