Shore Capital upgrades Informa to 'buy'

14th Nov 2022 15:44

(Sharecast News) - Analysts at Shore Capital Markets upgraded publishing firm Informa from 'hold' to 'buy' on Monday following the group's "strong" trading update.

Shore Capital, which also reiterated its 553.0p target price on the stock, made the move after Informa published "an upbeat trading statement" covering the ten-month period to the end of October.

"This morning's release indicates revenue growth across continuing businesses of 41% (excluding currency benefits reflecting outperformance of live and on-demand events across most markets and counting growth in academic publishing," said Shore Cap.

At the segmental level, Shore Cap noted that the largest part of Informer's business, its business-to-business markets, recorded roughly 65% year-on-year revenue growth throughout the period despite Covid-related restrictions in China.

Shore Cap also highlighted that Informa had raised its full-year revenue and adjusted operating profits guidance by £100.0m and £15.0m to £2.30bn-2.35bn and £490.0m-505.0m, respectively.

"The group's stock is trading on FY23F and FY24F P/E, EV/EBITDA and DY ratios of 15.8x, 10.5x and 2.3% and 13.1x, 9.1x and 2.7, respectively, which seems relatively undemanding following recent weakness," said Shore Cap. On that basis and given the positive tone of this morning's update, strengthening upgrade momentum, a return to dividend payments and further support from share buy-backs, we have decided to move out recommendation from 'hold' to 'buy'."

Reporting by Iain Gilbert at Sharecast.com