Berenberg lowers Informa to 'hold', raises target price
Analysts at Berenberg downgraded events and publishing company Informa to 'hold' from 'buy' on Thursday, pointing to strong movements in the group's share price, on its recent results and over the last few weeks in general.
Berenberg said the downgrade was "in no way" a closet 'sell' recommendation, stating it would "absolutely hang on to Informa shares if we already had them in a portfolio".
While the German bank considers the company to be "a relatively steady compounder", its analysts saw limited upside or catalyst in the near to medium term, which drove its decision to move to a 'hold' recommendation.
Berenberg, which upped its target price on Informa from 850p to 890p per share, said its new price target reflected small upgrades, largely FX-related, and a six-month roll-forward.
At its current share price, Berenberg said Informa trades on 17.4x earnings for 2019 and 16.3x for 2020, implying discounts of 16% and 13%, respectively.
"On an unlevered basis, Informa trades on 4.5% and 5.2% versus RELX’s 4.4% and 4.9%: not expensive, but equally suggesting limited upside after this post-results bounce," said Berenberg.
"We would hold on to existing positions, but see limited appeal for fresh money at this level: hence the downgrade to our rating."
As of 1300 BST, Informa shares had slipped 1.57% to 867.20p.