On Wednesday, BofA Securities analyst increased the stock price target for RELX Plc (REL:LN) (NYSE: RELX) shares to GBP47.00, up from the previous GBP43.00, while reiterating a Buy rating on the stock.
The company, currently valued at $86.34 billion, is trading near its 52-week high with a P/E ratio of 38.38x. According to InvestingPro analysis, RELX demonstrates impressive gross profit margins of 65.31%. Amira highlighted RELX as one of the firm's "25 stocks for 2025" and included it in their Europe 1 list, which features top investment ideas.
Analyst outlined five key themes that support the positive outlook on RELX. The company is expected to exhibit above-consensus growth in two of its divisions. Moreover, RELX is seen as having scarcity value due to its characteristics as a defensive growth compounder and as a beneficiary of generative artificial intelligence. InvestingPro data supports this defensive positioning, showing a low beta of 0.48 and a strong 33-year track record of consistent dividend payments.
The first theme emphasized is the acceleration of growth in the Legal division of RELX. The second theme suggests that the Science, Technical and Medical (TASE:PMCN) (STM) division is also poised to experience increased growth rates. The potential upside in the Risk division represents the third theme, while the fourth theme addresses the underestimation of the company's capacity for share buybacks by the consensus.
The final theme mentioned is the scope for a material rerating of RELX. The analyst expects the company to undergo a further rerating from its current 19x CY25E EV/EBITDA, which reflects a 10% five-year EPS compound annual growth rate (CAGR).
The analyst believes this rerating will eliminate the nearly 20% discount RELX currently has compared to its US peers. The comprehensive analysis by BofA Securities underscores a robust growth trajectory for RELX in the coming years. InvestingPro subscribers have access to over 15 additional investment tips and comprehensive financial metrics for RELX, helping investors make more informed decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.