Investors and market analysts will be closely monitoring the impact of this upgrade on the stock's value and trading activity. This move by the bank is expected to generate significant interest and speculation within the financial community.
British information and analytics company RELX is poised for a potential breakout amid growing uncertainty in the broader market, as suggested by Barclays analyst Nick Dempsey. In a recent note, Dempsey highlighted that RELX could provide steady growth in a climate where investors are seeking relative safe havens. Although the company's shares are not considered cheap compared to historical levels, they remain in line with peers in the information services sector. As a result, Dempsey upgraded RELX from equal weight to overweight.
Following the upgrade, U.S.-listed shares of RELX experienced a 1% increase. Year to date, the shares have risen over 5%, trading at a multiple of 36 times trailing earnings, notably higher than the S&P 500's multiple of 24. Despite the challenging landscape for U.S. stocks, with the S&P 500 entering correction territory amid escalating trade tensions, Dempsey believes that RELX is positioned to weather a potential recession better than most.
Share Performance Post-Upgrade
Following the upgrade, U.S.-listed shares of RELX rose by approximately 1%. Year-to-date, the shares have increased by over 5% and are currently trading at 36 times trailing earnings, which is significantly higher than the S&P 500's multiple of 24.
In a scenario akin to the 2008/2009 recession, Dempsey projected a possible 7% downside in adjusted EPS for RELX by 2026, excluding foreign exchange effects. While not entirely recession-proof, the company is seen as having a relatively low impact during economic downturns.
RELX's Resilience Amid Market Challenges
Despite the challenging environment for U.S. stocks, with the S&P 500 entering correction territory, RELX is expected to perform better than most companies in the event of a possible recession. Dempsey's analysis suggests that in a recession scenario similar to 2008/2009, RELX might experience a 7% downside in adjusted EPS for 2026, excluding foreign exchange impacts.
Dempsey emphasized that while RELX may not be considered extremely cheap at present, it offers high-quality growth prospects for the foreseeable future, with an estimated average of just under 11.0% constant FX EPS growth in the coming years, potentially improving over time.
High-Quality Growth Potential
While RELX may not be considered extremely cheap, it is viewed as offering high-quality growth potential for the future. Analysts anticipate an average constant FX EPS growth of just under 11.0% in the coming years, with the possibility of further improvement.
Barclays analysts suggest that British information and analytics company RELX could experience a breakout as broader market uncertainty increases. According to analyst Nick Dempsey, RELX provides reliable growth in times when safe havens are sought after. The shares, though not considered cheap compared to historical prices, are still in line with other information services peers. Dempsey has upgraded RELX from equal weight to overweight.
