Berenberg downgrades Informa to 'hold'

Analysts at Berenberg downgraded publishing firm Informa from 'buy' to 'hold' on Monday, stating it could now only see a "more limited upside" in the stock.

Berenberg said that while it continues to believe that the events industry will bounce back "strongly" from the Covid-19 pandemic, it also thinks that this fact has now been priced into Informa's share price - now up by 40% from the 400.0p level at which the group raised capital in April.

The German bank, which valued the group assuming that pre-Covid-19 profitability in the events business can be achieved by 2023, did up its target price on the stock from 535.0p to 610.0p but said its analysis suggested that the aforementioned recovery was now "more or less priced in".

For further material upside to be achieved, Berenberg thinks fundamental re-rating would be required but, given that the pandemic had demonstrated the vulnerability of the events business, the analysts said it was "hard" to see why a re-rating was "justified".

"We think Informa is a high-quality business, but we now see more limited upside in the shares," concluded the analysts.