Kepler ups Informa to 'buy' after 'encouraging' trading update

Kepler Cheuvreux upped its stance on Informa to 'buy' from 'hold' on Monday following an "encouraging" 10-month trading statement from the events and publishing company.

Kepler said the update brings into focus the 20% valuation gap versus professional publishing peers for only a marginal difference in organic growth. It highlighted organic growth of 3.5% for Informa versus 4% for Relx and Wolters Kluwer.

Kepler said the exhibitions business continues to grow "nicely" at around 4% to 4.5%, with bookings for 2019 events up with previous versions at this stage of the year. Meanwhile, the Middle East portfolio, cited as weak earlier in the year, has not deteriorated, although it has not improved materially either.

"The full year outlook for the UBM business has not changed (3% organic growth for the group and 4% for the events business, which implies an acceleration into year-end, versus +2.3% and 3.4% respectively at 10M, due to the back-ended timing of faster-growing shows), with many of the leading shows growing as fast as anything that Informa has to offer."

Kepler left its price target for Informa unchanged at 810p.

At 1500 GMT, the shares were up 2.4% to 727.80p.