UBS has reiterated its Buy rating on RELX with a 3,600p target price, arguing investor fears that driverless cars and artificial intelligence will erode the business are overdone.
The target sits around 42% above the 2,527p close on 25 September.
The broker has taken a deep dive into the two worries that dominate investor conversations about the information and analytics group.
The first is whether autonomous vehicles could disrupt RELX's US auto insurance business, part of its Risk division.
The second is whether AI could undermine its Legal arm.
UBS accepts both debates are valid but believes the risks are overstated.
Driverless disruption is decades away
The bear case is that self-driving cars, if safer, could mean fewer insurance transactions and shift underwriting from the driver to the vehicle.
But UBS's analysis of the US car fleet suggests slow turnover means meaningful disruption is unlikely before 2035, and may not become material until 2045 to 2050.
Even under deliberately harsh assumptions, it estimates US auto insurance revenues stay above today's levels through 2035.
Only around 7% of its target valuation comes from US auto insurance beyond 2040.
AI as opportunity
In Legal, UBS argues RELX's content advantage is hard to replicate.
As AI tools become more common, the risk of so-called hallucinations, where AI invents answers, should make authoritative content more valuable.
The broker also thinks AI will expand the overall market for legal workflow tools, leaving room for both RELX and new entrants to grow.
Its Protégé AI assistant should help unlock further revenue over time.
Room to re-rate
The shares have fallen about 17% this year despite improving earnings momentum.
UBS says the market is pricing in revenue growth of 4% a year to 2031, against its own forecast of 7%.
It nudged up its earnings forecasts by 1% to 2%.
The broker's bull case points to 3,895p, while its bear case suggests 2,100p.
