From a fundamental viewpoint, WH Smith seems undervalued compared to its peers based on its P/E ratio at 13.6 times 2014 estimates and its EV/Sales ratio at 1.06 for the same time period. While analysts expect sales to stay at their current level, margins should keep on rising during the coming years. The analysts’ consensus is largely buyer and the average target price offers a 17% potential.

Technically, the stock suffered from a consolidation movement after following a long term bullish trend. Thus, prices are back near the GBp 1008 support area which stopped their downward progression few trading days ago. Therefore, a rebound can be anticipated on this level with a new bullish dynamic on the equity.

Considering technical and fundamental elements, it seems to be an appropriate timing to immediately take a long position in WH Smith in order to benefit from the GBp 1008 support area. A first target price will be the GBp 1100 pivot point. A stop loss order will be placed under the entry point in case of further consolidation.