FTSE 100-listed events and exhibitions group Informa PLC (LSE:INF) has seen its share price suffer recently on investors’ concerns about the potential effects of an economic downturn and Donald Trump's funding cuts to academia, said analysts at Berenberg, which they believe creates an "attractive buying opportunity".
Having assessed the impact that potential cuts to US government university funding could have on the group's Taylor and Francis (T&F) business, the analysts said in a note sent to clients on Friday that the B2B events sector is "less cyclical than investors think" and the impact on T&F "should be limited".
With a relatively low cost of space at the group's "must attend" events, and with exhibitors accounting for 60% of B2B events revenues and circa 70% of profit, this revenue stream is "resilient, in our view" and has been shown in previous downturns by the Tarsus and UBM businesses acquired by Informa.
Another 10% of B2B event revenues are derived from subscriptions, which are also expected to be resilient as Informa has aligned itself to sectors and economies with structural growth.
Proposals by the Trump administration indicate a potential 44% cut to federal funding for academia from 2026, "which could be a headwind to T&F", the analysts acknowledged.
They note that the division's geographical exposure, proportion of subscription revenue and three-year renewal cycles suggest around a £33 million impact in 2026, around 0.8% of Informa's group revenue under this scenario.
Any cut would need to pass through Congress, which has shown bipartisan support for R&D funding.
Another subject that the Berenberg team chose to highlight is Informa TechTarget, which provides data-driven marketing services to B2B tech vendors.
"Market conditions are tough, but industry reports suggest ITT is a leader in its field, with clear structural growth drivers," the analysts said, adding that ITT accounts for 3% of the enterprise value in its sum-of-the-parts market valuation for the group.
Following an acquisitive couple of years, Informa is also expected to up its rate of share buybacks above the initial minimum £200 million announced at the start of the year.
The disposal of Informa’s 6.7% stake in Norstella will potentially also accelerate deleveraging and provide additional firepower.
"We think there is capacity for another £200 million in buybacks this year, excluding this disposal."