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Deutsche Bank downgrades RELX to ‘hold’ from ‘buy’, lowers target price by 2%

Last updated: 15:50 13 Feb 2019 GMT, First published: 15:20 13 Feb 2019 GMT

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Deutsche Bank’s analysts added: “With the PE relative having now moved back up to 1.44x, we think the risk-reward is no longer as positively skewed"

Deutsche Bank has downgraded its rating for RELX PLC (LON:REL) to ‘hold’ from ‘buy’ and lowered the target price to 1,750p from 1,780p, but left forecasts for the publishing company, previously known as Reed Elsevier, unchanged.

READ: RELX leaves full year guidance unchanged after ditching dual Anglo-Dutch structure

In a note to clients, Deutsche Bank analysts said: “Our investment thesis on RELX has been based on our view that the shares were discounting an overly negative outlook for the science (STM) market.”

Deutsche Bank’s analysts added: “With the PE relative having now moved back up to 1.44x, we think the risk-reward is no longer as positively skewed. As a result, we move to Hold (from Buy). Our forecasts are unchanged, but our TP falls very slightly (-2%) to 1,750p.

"Within the space our preference lies with Informa (~30% upside potential). Between RELX and closest European peer Wolters Kluwer (Hold), our preference would be for RELX, given the latter’s superior organic revenue growth.”  

The FTSE 100-listed business information and exhibitions firm saw its shares ease 0.2% lower at 1,724p in late afternoon trading.

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