WH Smith's consensus price target was cut to £9.62 (from £10.27) as analysts flagged heightened uncertainty and risk following the identification of profit overstatement and financial inaccuracies, prompting a more cautious outlook until transparency issues are resolved.
Analyst Commentary
- Profit overstatement identified by WH Smith, increasing uncertainty and leading to rating suspension by key brokers.
- Bearish analysts citing lack of visibility and heightened risk following the disclosure of financial inaccuracies.
- Significant price target reductions reflecting reassessment of earnings quality and future growth prospects.
- Ongoing Hold ratings indicate caution amid unresolved questions around financial controls and transparency.
- Adjusted valuations incorporate a more conservative outlook until clarity is provided and confidence is restored.
What's in the News
- Goldman Sachs suspended its rating on WH Smith due to insufficient information following an identified overstatement of profits. (Periodicals)
- WH Smith disclosed an overstatement of profits, prompting concerns about financial reporting accuracy. (Periodicals)
- Palliser Capital acquired nearly a 5% stake in WH Smith, positioning itself as an activist investor. (Key Developments)
- Palliser Capital intends to scrutinize WH Smith’s leverage targets and capital allocation policy to improve shareholder returns. (Key Developments)
- The recent activist involvement and profit overstatement have increased uncertainty about WH Smith’s financial management and future strategy. (Combined)
Valuation Changes
Summary of Valuation Changes for WH Smith
- The Consensus Analyst Price Target has fallen from £10.27 to £9.62.
- The Future P/E for WH Smith has fallen from 13.10x to 12.04x.
- The Net Profit Margin for WH Smith has risen slightly from 7.40% to 7.70%.
Disclaimer
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