Berenberg cuts target price on Relx

Following "slightly disappointing results" at the group level, primarily due to larger-than-expected losses in the company's exhibitions division, Berenberg opted to "remain on the sidelines" when it came to Relx.

While the German bank acknowledged that the blue-chip stock was "clearly not as affected by Covid-19 as peer Informa", it highlighted that neither was it "as resilient as Wolters Kluwer".

"Valuation is not yet sufficiently compelling to prompt a change in rating, although we continue to see Relx as a quality stock that has strong appeal in a broad portfolio," said Berenberg.

Berenberg said its price target reduction reflected lower medium-term estimates, which were affected by currency changes, as well as more cautious operating estimates, plus a slightly higher level of net debt.

"With 56% of 2019 revenues in North America, Relx is obviously heavily geared towards the US dollar, and the move since late March is now factored into our estimates as well," said the analysts.

"This explains more than half of the downgrades to our numbers in 2021 and 2022. The balance reflects the slightly more cautious pace of recovery that we now assume across the group, particularly in the exhibitions business."