JPMorgan hikes Relx price target

JPM noted that Relx hosted a legal seminar last week.

It said Legal growth has accelerated from 2% in 2019 to 6% last year driven by less print and more data driven analytics supported by extractive AI.

"This year growth has accelerated to 7% supported by the initial benefit of Lexis+ AI which applies generative AI to its authoritative content to drive significant productivity benefits for lawyers," JPM said.

"In January it will launch Protégé, a next-generation personalised AI assistant which tailors support to individual lawyers and law firms by applying generative AI to the user’s own proprietary documents to provide more informed, accurate and contextually relevant results.

"Lexis believes it currently has the best AI product in terms of capability, speed and accuracy. We believe Protégé’s personalisation further extends its lead."

JPM maintained its ‘overweight’ rating on the shares, which are also on its ‘Analyst Focus List’.

It said the new price target would imply a 2025 price-to-earnings multiple of 35x (versus circa 28x today), which is a slight premium to the broader US peer group trading on 34x, which includes more cyclical credit bureaus and rating agencies. However, it’s a discount to Relx’s closest US peers of Thomson Reuters (circa 41x) and Verisk (39x) despite Relx offering similar growth.

"We believe that the sale of exhibitions on a 3-5 year view could unlock a further re-rating," JPM said.

Relx is a provider of information-based analytics and decision tools for professional and business customers.