Bookseller and stationer WHSmith is undervalued according to broker Panmure, which reiterated its buy stance on the stock.

Panmure analyst Philip Dorgan maintained the growth potential of the retailer’s travel division is being underestimated and fears about competitive threats are overdone.

Reiterating his buy advice and sum-of-the-parts 584p price target, Dorgan  argued that WHSmith “can sustain its high returns, despite the growth of ebooks and the challenge of the supermarkets”.

He concluded: “Sum-of-the-parts analyses value the good bits of a company accurately, but significantly over value the less good bits.

“Therefore, for its value to be extracted, WHSmith has to gain the market’s confidence in the long-term opportunity in travel and demonstrate that the high street’s profits are not heading for a collapse. We think that it can do both.”