WH Smith Stock Downgraded by RBC Amid Weaker Outlook

RBC Slashes WH Smith Rating and Price Target

RBC Capital Markets has downgraded WH Smith Plc from “outperform” to “sector perform”. The broker also reduced its price target for the stock to 650p from 675p, citing concerns over future profitability.

Analyst Forecasts Signal Caution

The downgrade follows a revision in WH Smith's pre-tax profit forecasts for fiscal years 2026 and 2027, which were trimmed by 3-4%. RBC’s new underlying pre-tax profit forecast for FY26 is £99 million. This figure falls just below the company's own guidance range of £100-115 million.

Impact on Market Consensus

RBC's revised estimates place it significantly below the market consensus. The firm's FY26 forecast is approximately 6% lower than the Visible Alpha consensus. Furthermore, its FY27 estimate is a notable 12% below the consensus, indicating a more pessimistic outlook on the retailer's performance.

Outlook Summary

The adjustment by RBC Capital Markets reflects a cautious stance on WH Smith's near-term earnings potential. Investors will be closely watching for the company's response and future performance reports to see if these revised, lower expectations materialize.

FAQ

Q: Why did RBC downgrade WH Smith stock?
A: RBC downgraded WH Smith after cutting its pre-tax profit forecasts for FY26-27, placing its estimates below company guidance and market consensus.

Q: What is the new price target for WH Smith from RBC?
A: The new price target for WH Smith stock is 650p, reduced from the previous 675p.

Source: Investing.com