Reed Elsevier upgraded to 'overweight' by Barclays

Barclays upgraded Reed Elsevier to ‘overweight’ from ‘equal weight’ and raised the target price to 1,225p from 1,135p.

“We believe Reed is a good value defensive stock with strong market positions,” said Barclays. “We see potential for progress on earnings per share momentum, driven by better margins, and we now see Reed as looking good value for its growth among a defensive peer group beyond the media sector.”

It said that the catalyst going forward would be a full-year margin upgrade at the company’s first-half results. This would support a re-rating, as confidence in operational gearing improves, noted Barclays.

“Even if this is not delivered, we would argue Reed’s shares can still deliver decent performance without a catalyst, given valuation relative to other defensives,” said the bank.

At 09:25, the shares were up 2.1% at 1,084.00p, topping the FTSE 100 leader board.