LONDON (SHARECAST) - Investec has put its target price under review for newsagents chain WH Smith following the group's pre-closing trading update on Thursday, saying that the shares merit a higher rating.
"WH Smith has indicated another welcome but unexpected profit before tax upgrade, further to our upgrade post the Q3 IMS, to the top-end of current market expectations, namely £101m compared with our £100m forecast," Investec said.
The broker also highlighted the company's £50m share repurchase programme for 2013, "reflecting the ongoing strength of its cash generation".
Investec has reiterated its 'buy' rating on the stock, saying its investment case is based on "the combination of profit growth, cash generation (= good yield and further buy-backs) and the growth opportunities in Travel."
The broker has put its forecasts under review.
By 10:12, shares were trading 4.73% higher at 609.5p.