Smiths News (LON:SNWS) Stock Price Down 9.8% - Time to Sell?

Key Points

• Smiths News shares fell 9.8% to GBX 73.26, with trading volume nearly six times its average, as investors reacted to full-year profit pressure linked to costs from new contracts.
• The company reported £1.04 billion in full-year revenue and secured national distribution contracts worth £375 million annually, but its bottom line declined.
• Despite the sell-off, Canaccord Genuity and Berenberg retained Buy ratings and raised their price targets to 105p and 110p, respectively; the consensus target is 103.33p.

Smiths News plc (LON:SNWS - Get Free Report)'s share price was down 9.8% on Wednesday. The stock traded as low as GBX 71.20 and last traded at GBX 73.26. 5,007,626 shares changed hands during trading, an increase of 597% from the average session volume of 718,017 shares. The stock had previously closed at GBX 81.20.

Key Smiths News News

Here are the key news stories impacting Smiths News this week:

• Positive Sentiment: Smiths News reported national distribution contracts worth £375 million annually, supporting its “Go National” plans and providing substantial contracted business. Smiths News Reports £1.04 Billion Revenue and Secures National Distribution Contracts Worth £375 Million Annually
• Positive Sentiment: Canaccord Genuity raised its target to 105p from 95p, and Berenberg lifted its target to 110p from 88p; both retained Buy ratings. Full-year results and broker updates
• Neutral Sentiment: Full-year revenue was reported at £1.04 billion, but the company’s bottom line declined. Smiths News Plc Announces Decline In Full Year Bottom Line
• Negative Sentiment: Reports attributed the profit pressure to new-contract costs, weighing on the market’s reaction to the results. This appears to be the main near-term driver of the share-price decline. Smiths News shares slide on profit hit from new contracts

Analysts Set New Price Targets

A number of brokerages recently issued reports on SNWS. Berenberg Bank increased their price objective on Smiths News from GBX 88 to GBX 110 and gave the stock a "buy" rating in a report on Wednesday. Canaccord Genuity Group raised their price objective on shares of Smiths News from GBX 95 to GBX 105 and gave the company a "buy" rating in a research report on Wednesday. Three investment analysts have rated the stock with a Buy rating. Based on data from MarketBeat, the stock presently has an average rating of "Buy" and a consensus target price of GBX 103.33.

Smiths News Stock Down 9.8%

The stock's 50 day moving average price is GBX 73.77 and its 200-day moving average price is GBX 69.32. The company has a market cap of £177.32 million, a PE ratio of 6.85, a PEG ratio of 0.29 and a beta of 0.31. The company has a debt-to-equity ratio of 501.69, a quick ratio of 0.83 and a current ratio of 0.90.

Smiths News (LON:SNWS - Get Free Report) last released its quarterly earnings data on Wednesday, November 4th. The company reported GBX 11.30 earnings per share (EPS) for the quarter. Smiths News had a net margin of 2.59% and a return on equity of 350.65%. The firm had revenue of GBX 103.62 billion for the quarter. On average, analysts predict that Smiths News plc will post 10.56 earnings per share for the current year.

About Smiths News

In 1792 we started delivering the nation's newspapers. Today, we're proud to be the UK's largest wholesaler of newspapers and magazines, serving 24,000 retailers from superstores to corner shops. Service and efficiency put us at the forefront of our industry and with 55% market share we are the leading player in one of the world's fastest-moving supply chains. Our teams go further, when others stop, striving to meet the highest standards in all we do.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.