In a sector note, the broker said the publisher’s current strategy, which focuses on the acceleration fo digital capacity in academic and professional publishing, had constrained near-term profit/loss progression but should build the opportunity for “superior returns in the medium term”.
For the moment, Peel Hunt said the company’s strong growth was being fuelled by a resurgence of interest in the Harry Potter franchise coinciding with the series’ 20th anniversary, a new illustrative series, and the Fantastic Beasts film franchise.
The broker added that Bloomsbury’s balance sheet held “a substantial cash balance” and material investment in working capital, however it did not show the value of its copyright library.
Analysts also hiked their price target to 270p from 250p, saying the valuable copyright library underpinned their long-term positive recommendation.
In late-morning trading Thursday, Bloomsbury shares were up 1.9% at 217p.