WH Smith PLC "Checking in more equity; NA needs to stabilise" (Neutral) Huynh

研报英文原文证据摘录

WH Smith PLC "Checking in more equity; NA needs to stabilise" (Neutral) Huynh

risk, it comes at

From To % ch Cons.

the cost of material dilution. 08/26E 45.05 32.56 -28 47.96

08/27E 56.64 40.41 -29 52.93

NA drives the downgrade, while self-help becomes more explicit 08/28E 66.08 48.78 -26 58.74

We see the guidance reset as mainly North America-led, with some pressure likely to

Hai Huynh, CFAcarry into H1 FY27. While the balance sheet action should reduce financial risk, the

Analyst

operating recovery still depends on stabilisation in US traffic, spend per passenger, hai.huynh@ubs.com

promotional intensity and brand marketing support. We now build in a slower recovery +44-20-7567 7051

path rather than assuming the Q3 reset fully de-risks FY27. Self-help is also becoming

Natasha Brilliantclearer with expected right-sizing and strategic options from low-return Las Vegas

exposure, further RoW country exits and a shift towards a cleaner Travel Essentials-led natasha.brilliant@ubs.com

platform. The upside case is a simpler, higher-return estate, in our view, but the risk is +44-20-7567 0645

that restructuring costs, exits and weaker US demand delay the recovery in FCF and

Joern Iffert, CFA

ROIC.

joern.iffert@ubs.com

Valuation: DCF-derived PT of 480p (from 600p); Neutral +41-44-239 88 00

The shares trade on c10x FY27E P/E and are down c35% YTD. We adjust our DCF

assumptions, including raising our WACC to 10.5%, with beta increased to 1.5x from

1.4x to reflect higher execution risk and capital raise volatility. From here, we await more

evidence that NA LFLs stabilise, Travel Essentials remains a credible growth engine, and

balance sheet flexibility translates into better capital discipline.

Highlights (£m) 08/23 08/24 08/25 08/26E 08/27E 08/28E 08/29E 08/30E