Informa PLC (LON:INF) has been downgraded to ‘hold’ from ‘buy’ by analysts at Berenberg, who said that while they believed the events industry will “bounce back strongly” from the pandemic, they believed this was now priced into the shares of the FTSE 100 exhibitions group.
In a note published last Friday, the broker also upped their target price for the firm to 610p from 535p, saying the shares were now “up by 40% from the 400p level at which the group raised capital in April, and 60% from the lows reached in late September”.
“We have valued the group assuming that pre-[coronavirus] profitability in the events business can be achieved by 2023, and our analysis suggests that this recovery is now more or less priced in”, Berenberg said, adding that a “fundamental re-rating is required” to achieve further upside in the stock.
However, given that the pandemic had “demonstrated the vulnerability of the events business”, which made it hard to justify a re-rating.
“We think Informa is a high-quality business, but we now see more limited upside in the shares”, the broker said.
Shares in Informa were flat at 561.2p in late-morning trading on Monday.