Broker snap: Reassuring numbers from Reed Elsevier, says Nomura

16th Feb 2012 10:41

Nomura has reiterated its buy recommendation and 668p target for business information solutions provider Reed Elsevier, saying that the group's full-year results were "reassuring".The firm said that underlying sales growth was 2% in 2011, 3% excluding biennial cycling, compared with Nomura's 1.1% forecast."The main differences were in Risk where growth was 4% vs. our 2.9% forecast and Exhibitions where growth was flat versus our -2% forecast," the broker said."For 2012, the company expects continued growth in organic revenue. Consensus is around 2-2.5% and our current 1.3% estimate looks a touch conservative."Earnings before interest, tax and amortisation (EBITA) grew by 5% year-on-year to £1,626m, 2.5% ahead of Nomura's £1,586m estimate, while earnings per share rose 7.6%, 3.1% above forecasts.The broker says that the group's valuation - with the stock trading at 10.8 times earnings - looks "favourable".BC