RELX Valuation Looks Attractive Despite AI Concerns, Analyst Says

Hargreaves Lansdown believes RELX’s (LON: REL) valuation looks attractive, arguing in a recent article that the market may be underestimating the information and analytics group’s ability to harness AI within its own products.

Analyst Aarin Chiekrie noted that, unlike Apple and Coca-Cola, the two other names mentioned in its list of three companies with strong pricing power, RELX “isn’t a household name,” but provides proprietary data, analytics and workflow tools across insurance, legal, scientific and regulatory markets.

These services “are deeply embedded in day-to-day operations, making them difficult to replace and giving RELX significant pricing power.”

Much of the appeal, according to Hargreaves Lansdown, comes from the essential nature of the products. Insurers assessing risk, lawyers conducting research or banks performing mandatory checks “can’t simply switch providers overnight,” reducing customers’ price sensitivity.

The firm added that RELX has spent decades building proprietary datasets that are difficult for competitors to replicate, helping keep retention rates high.

Recurring revenue is seen as another advantage, with more than half of group sales coming from subscription contracts, providing predictable cash flows and visibility over future earnings that supports consistent investment in new products and AI capabilities.

Hargreaves Lansdown acknowledged RELX’s valuation “has come under pressure over the past year” amid fears AI could disrupt parts of its business, particularly Legal, but said the market may be underestimating its ability to adapt. It noted encouraging recent trading, with all four divisions delivering strong underlying revenue growth.

The stock is down13.5% for the year-to-date and 28% in the last 12 months, trading at 2,604p.

The firm said proprietary data, high switching costs and regulated end markets give RELX a durable advantage, though the key risk is AI-driven competitors eroding it faster than expected.