Berenberg downgrades Reed Elsevier, valuation 'up with events'

17th Mar 2014 11:21

Berenberg has downgraded its rating for publishing and information services group Reed Elsevier from 'buy' to 'hold', saying that while it has kept a positive stance on the stock upside is limited.The broker said that Reed delivered a "textbook" set of 2013 results despite disappointing figures from its professional publishing peers.Organic growth was 3%, underlying operating profits rose 5%, and margins improved due to portfolio re-shaping and operating leverage. "Nothing to pick holes in, in our view," it said. "Amid warnings from Pearson and WPP, a raging debate around BSkyB, and what looks like the end of upgrades for ITV, Reed Elsevier should retain its appeal for UK investors, although valuation is up with events, we think," the broker said."While we still like the story, we do not see reasons for further re-rating, while upgrades are becoming incrementally less significant, particularly given foreign exchange headwinds. We downgrade to 'hold', but would be buyers on any weakness."The target price has been lifted from 895p to 930p.The stock was down 0.1% at 912p by 11:34.BC