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Informa "well placed" to consolidate global events market, says Shore Capital as it upgrades to 'buy'

The City broker's analysts upgraded the stock to 'buy' from 'hold', and set a target price of 775p

Tea cup
Informa has hosted the World Tea Expo

Informa PLC (LON:INF) is looking like a strong player as it expands into the international events industry, according to City broker Shore Capital which upgraded its rating for FTSE 100-listed stock to a ‘buy’ from 'hold' at a target price of 775p.

The blue-chip company, which hosts events such as the World Tea Expo and publishes academic journals, bought rival company UBM in 2018, more than doubling its market value and establishing it as the leader in the global exhibitions industry, with a portfolio of over 900 events.

“We like the fact that quality events deliver strong cash flow and revenue visibility and are not subject to the disruptive digital influences experienced across other media channels,” said ShoreCap's analysts in a note to clients.

They added:“Over all [sic] we expect GDP+ growth revenue across the international events industry and also believe that INF is well-placed to participate in future consolidation by plugging complementary acquisitions into its substantial infrastructure.”

The analysts said their view was supported by Informa’s update in November, which showed the company is on track to hit its full-year target revenue growth of 3.5%, as well as “the strength and resilience of future growth” with good visibility in event bookings and renewals for the coming months.

Aside from its exhibitions business, the analysts noted that Informa's other activities offer a combination of “steady and predictable progress” from academic journals at its Taylor & Francis publishing arm, and “improving momentum and growth following concerted investment and reorganisation” at its Connect, Intelligence and Tech divisions.

“More broadly, we remain positive on the quality and scale of Informa’s core B2B brands and the organic growth and cash generation/debt reduction that they should deliver despite on-going uncertainty on the UK’s post-Brexit trading arrangements,” the ShoreCap analysts concluded.

Informa shares rose 2/5% to 795p in mid-morning trading on Friday.

Quick facts: Informa PLC

Price: 416.4 GBX

Market: LSE
Market Cap: £6.26 billion

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