Broker tips: Smiths News, Solid State
By Iain Gilbert
Date: Monday 29 Jun 2026
(Sharecast News) - Analysts at Canaccord Genuity reiterated their 'buy' rating on Smiths News on Monday after the firm secured a second major long‑term national contract, this time with Associated Newspapers, further strengthening its position in UK print distribution.
Canaccord Genuity said the new deal expands Smiths News's footprint with ANL to full national coverage from January 2028 and extends their partnership through to July 2037, giving the group strong long‑term revenue visibility. Smiths News expects the agreement to generate around £105m of incremental annual revenue from 2028, with the two recently awarded national contracts together representing about 36% of the UK newspapers and magazines market.
The Canadian bank stated the ANL win materially deepens the long‑standing relationship between the two companies and positions Smiths News as ANL's exclusive wholesale distributor across Great Britain. It follows the national contract awarded by News UK on 17 June, which was expected to add roughly £125m of annual revenue from July 2027.
Canaccord Genuity noted that both contracts will require previously flagged one‑off implementation and early‑life transition costs in FY27 as the group scales its network to support nationwide distribution. Delivery service charges for retailers will be frozen for the duration of the ANL agreement.
Management continues to expect returns on invested capital above the group's hurdle rate and earnings accretion from FY28. The expansion will be funded from existing cash and facilities, with the board maintaining its intention to keep ordinary dividends for FY26 and FY27 at or above the current consensus of 5.2p.
Canaccord added that the stock's valuation remains attractive, pointing to an August 2026E price-to-earnings ratio of 6.5x, a dividend yield of 7.9% and a free cash flow yield of 13.6%. It added that Smiths News holds a market‑leading position with a diversified customer base and long‑run contracts. The broker also reiterated its 95p target price on the stock.
Berenberg hiked its target price on electrical components manufacturer Solid State from 245p to 275p on Monday as it said the firm had delivered a stronger‑than‑expected set of FY26 results, with revenue coming in 1% ahead of guidance and more pronounced beats on adjusted underlying earnings and earnings per share - up 7% and 6%, respectively.
Berenberg said all three divisions - components, power and systems - had posted revenue and profit growth, underlining a "robust" performance across the group. Components revenue rose 8.1%, supported by design wins in the UK and US and improved conditions across industrial, defence and medical markets, while Power division revenues grew 15.6%, and systems delivered the strongest growth, with revenue up 48% on continued demand for communications products.
The German bank noted that Solid State's order book slipped 1% year-on-year to £102.4m, reflecting the inclusion of last year's £19m NATO Support and Procurement Agency award. Adjusting for that contract, however, its underlying order book grew 21%, and Berenberg said it remains optimistic that further communications orders could be announced this year.
Berenberg raised its forecasts and said Solid State's defence relationships, market penetration and exposure to long‑term structural tailwinds make the shares attractive, noting the group trades on 16.5x FY27 earnings and 12x EV/EBIT.
Reporting by Iain Gilbert at Sharecast.com
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