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Diverse opinions on RELX ahead of results this week, with an Investec 'buy' just in favour

Investec's analysts said they see a “nice buying opportunity" ahead of the full-year numbers, due on February 15
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However, the analysts at BarCap downgraded their recommendation on RELX to ‘equal-weight’ from ‘overweight’

RELX PLC (LON:REL) edged higher today ahead of the information and analytics company's full year results later this week, with some bullish comments from Investec Securities countering a downgrade in rating by Barclays Capital.

In late morning trading, the FTSE 100-listed shares were 0.3%, or 5p higher at 1,487p.

READ: RELX Group reports continued underlying revenue growth, reaffirms full year outlook

In a note to clients, the analysts at Investec reiterated a ‘buy’ rating on RELX shares, with a price target of 1,900p, and said they see a “nice buying opportunity" ahead of the numbers, due on February 15.

The analysts added: “We unashamedly focus on the equity investment case (not bond arguments), with an attractive broad shift to higher value/quality data analytics and US skew.

“Valuation is top end for UK Media, cheap for a high-quality data business; though share price falls bring the B2B premium spread in materially.”

However, the analysts at BarCap downgraded their recommendation on RELX to ‘equal-weight’ from ‘overweight’ having reduced their sum-of-the-parts based price target to 1,600p due to a modest earnings downgrade, and slightly lower multiples across the group due to peer de-rating.

They said: “RELX did rerate on a relative basis: reliable stories were scarce. They have now given this back. But we feel that further relative rerating would require more confidence on this issue. And that is what we now struggle to see in the short term.”

RELX has an “uncertainty problem”

The analysts also noted that RELX has an “uncertainty problem” which it thinks changes the story, which has been about reliability for the last five years.

They said: “The uncertainty comes in Scientific, Technical and Medical (STM) (33% of revenues; 40% of EBITA), where a protracted negotiation with a consortium of German universities is raising question marks about future journals' growth.

“We had previously thought there would be a resolution to this negotiation and the issue would start to drift away. We have changed our mind after speaking to a handful of industry consultants.”

The analysts added:” While the comments varied, the overall impression was that the situation will drag on, and it will not be easy in the next 6-9 months to build confidence on future growth at RELX's STM.”

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