Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

UBS cuts RELX to ‘sell’, believes earnings acceleration which drove material outperformance over last 3 years “coming to an end”

Following a 17% share price appreciation in the last three months, in part driven by a weaker pound, the Swiss bank has left its target price for RELX unchanged at 1,555p
Publishing
That is below the FTSE 100-listed publisher's current share price of 1,600p, down 3.3% on Wednesday’s close

UBS has put a dampener on shares in RELX PLC (LON:REL), downgrading its rating for the Anglo-Dutch publishing group to ‘sell’ from ‘neutral’ as they believe “an earnings acceleration which drove material outperformance over the last 3yrs is coming to an end”.

Following a 17% share price appreciation in the last three months, in part driven by a weaker pound, the Swiss bank has left its target price for the FTSE 100-listed firm unchanged at 1,555p, which is below the current share price of 1,600p, down 3.3% on Wednesday’s close.

READ: RELX issues "steady as she goes" AGM statement

In a note to clients, UBS’s analysts noted three reasons for their downgrade: “1) we forecast underlying earnings growth to decelerate from +6% in 2017 to +5% in FY18-21, 2) we see increasing structural risk to RELX's Journal business (c20% of group revs, 55% of STM); and 3) we believe RELX's valuation is full on 19x FY19E EPS with risks now firmly skewed to the downside. “

They added: “Our upside/downside spectrum shows only 6% upside with 28% downside. Further, marking RELX's divisions to listed peers suggests the stock is 7% overvalued at current prices.”

View full REL profile View Profile

RELX PLC Timeline

Related Articles

clapperboard
09:30
According to Liberum, FFI expects the US performance to normalise by the end of this financial year
Throne of Glass
October 23 2018
Rowling, Rowling, Rowling ... keep those titles rolling. Mind you, it's not all about Ms Rowling; Sarah J Maas title revenues grew 47% in the first half of the financial year and dieters are gorging on Tom Kerridge's books
ipad
September 19 2018
“Cello Health is successfully building its early stage asset development advisory platform for biotech clients, as well as growing its core later stage and post-launch franchise with pharmaceutical clients”

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use