Momentum is building at WH Smith, 'buy' says Investec

21st Aug 2014 11:35

Trading at WH Smith is "building momentum", according to Investec, which repeated its 'buy' recommendation for investors on Thursday following an 'in-line' pre-close statement from the stationery, magazines and books retailer.The company, which operates a chain of high street, railway, motorway and airport stores, said that results for the year to 31 August should be in line with market expectations."Most interestingly, we understand like-for-likes within Travel have improved and could be positive for the first time since 2008," said Investec analyst Kate Calvert.Meanwhile, she said that high street stores "continue to benefit from management's ability to deliver cost efficiencies and improvements in gross margins".Heading into the new financial year, Calvert said that momentum is building with a shift towards positive LFL sales in Travel "encouraging". What's more, there could be more upside risk to estimates given signs of a cyclical recovery in UK air passenger numbers and good exposure internationally."The shares trade at a circa 20% discount to the retail sector and are attractive as a more defensive play with a strong management focused on creating shareholder value. Buy," she said.Investec maintained a 1,400p target price for the shares, which was down 0.7% at 1114p by 11:28.BC