Broker tips: WH Smith, Howden Joinery, Weir

(Sharecast News) - Analysts at Canaccord Genuity cut their price target on WH Smith from 680p to 555p on Wednesday, after the retailer lowered profit guidance amid softer trading in North America and weaker passenger volumes across its travel estate.

Canaccord Genuity said the WH Smith's update for the 14 weeks ended 6 June showed revenues up 5% with likeforlike growth of 2%, but noted a clear slowdown in recent weeks. North America LFL sales fell 1% for the period and 4% over the past seven weeks, while Air in the UK was hit by disruption to Middle East flight schedules and lower spend per passenger. Management has now guided for FY26 adjusted pretax profit of �75m to �90m, down from April's �90m to �105m expectation.

The Canadian bank cut its FY26 profit forecast by around 17% to �76m, with similar downgrades across later years, while earnings per share estimates were reduced more sharply to reflect dilution from the �106m equity raise, which has strengthened the balance sheet and lowered expected FY26 net debt to about �320m.

Canaccord Genuity said North America remained under pressure, particularly at InMotion and Resorts, while restructuring of underperforming stores continued. However, it maintained its 'buy' rating, citing longerterm global growth opportunities, but said the reduced target price reflected the weaker trading outlook and estimate revisions.

Berenberg lifted its price target on Howden Joinery to 1,075p from 1,000p on Wednesday, after incorporating the firm's recently completed acquisition of DIY Kitchens into its forecasts.

Berenberg said the deal, announced earlier in June and now finalised, prompted a 4% to 9% uplift to underlying earnings estimates across the forecast period, though earnings per share rises by a more modest 1% to 2% due to higher interest costs and the issue of new shares.

DIY Kitchens gives Howden access to the nontrade, directtoconsumer kitchen market without cannibalising its core tradeonly model, said Berenberg, which also noted the acquisition broadens Howden's reach to digitally confident customers who prefer to selfmanage design and purchasing.

The German bank noted that DIY Kitchens generated �136m of revenue in FY25, growing more than 17% annually over five years, with �37m of adjusted EBIT and a 27% margin. The �390m enterprise value includes �292.5m in cash and �97.5m in new shares. Freehold property worth roughly �55m was also included in the deal.

Berenberg, which kept its 'buy' rating on the stock, said the firm's balance sheet remained a key strength, with Howden ending FY25 on �344m net cash and expected to retain around �70m in FY26, supported by free cash flow of more than �240m a year through the forecast period.

Howden's shares trade on 14.4x FY27 P/E and 8.0x EBITDA, Berenberg added.

JPMorgan lifted its price target on Weir Group on Wednesday to 3,800p from 3,500p and maintained its 'overweight' rating on the stock as it cited an attractive entry point despite first-half concerns.

"This week we hosted CFO Brian Puffer in an internal sales briefing and we came away incrementally more positive," said JPM, which added that while Weir was not present at its Industrials Conference last week, it was a heavily debated name as peers spoke to robust pipelines and, importantly, strong growth in the pumps market.

"We see the current debate as th�reefold: 1) Concerns on market share losses to other OEMs; 2) Growth outlook relative to history; and 3) Significant H2 weighting this year (we expect c.40/60 split on adjusted EBITA versus consensus: 42/58)," JPM said.

Critically on market share, the bank said it believes the market is overlooking the differences in portfolio - breadth, commodity exposures, market share - amongst the players that is contributing to differences.

Consensus currently expects around 5.8% for FY27 and FY28, which is lower than the circa 7% through-cycle growth rate in Aftermarket, implies no significant catch-up in Original Equipment, and no benefit from the strong software growth, it said.

"We increase our order expectations to circa 7% for the following two years, which increases our 2028 adjusted EBITA forecast by 4%," JPM said. "While we see some risk due to the H2 weighting, we see these issues as well flagged and more than captured by the recent de-rating."