Broker snap: WH Smith's fair value, Peel Hunt keeps at hold

25th Jan 2012 12:20

Peel Hunt has maintained is hold rating on high street retailer WH Smith after Christmas trading was "in line with subdued like-for-like [LFL] expectations."The company said total sales for the group were down 3% in the 21 weeks to January 21st, compared to the corresponding period a year earlier. LFL sales were down 5% in the first 21 weeks of the group's financial year, but that represents a slight improvement on the previously reported 6% dip in LFL sales for the first 10 weeks of the fiscal year.Peel Hunt highlights that high street book LFL sales were down 7-8% as this year's titles were fairly weak. However, the broker says the performance as "indicative of the strength of releases rather than a technology impact".The broker makes no changes to its forecasts following the statement and says that the stock - trading at 9.3 times prospective earnings - represents fair value.The target price is left at 525p.Investors were clearly pleased with the statement with shares up 4.04% at 553.5p by lunchtime on Wednesday.BC