Goldman Sachs Starts Relx at Buy, Arguing AI Fears Are Misplaced

Goldman Sachs initiated coverage of Relx (LON: REL) with a Buy rating and a 3,000p price target in a note to clients on Wednesday, pushing back against the view that the data analytics and publishing group is vulnerable to artificial intelligence disruption.

Analyst Adam Berlin told investors in a research note that Relx is being misplaced in the AI “at risk” category. Berlin explained that the company has a “strong moat” and that its new suite of AI products should drive an acceleration in sales growth toward 8%.

Goldman’s bullish case adds to a mixed picture among analysts covering the stock.

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Citi upgraded Relx to Buy in April, also arguing that AI concerns were overdone, though it cited valuation following a 17% year-to-date decline at the time of that call.

Morgan Stanley moved in the opposite direction last month, cutting the stock to Equal Weight from Overweight and trimming its price target to 2,970p from 3,320p on valuation grounds, while noting that workflow-focused startups are scaling rapidly and keeping competitive pressure elevated.

Goldman’s 3,000p target is broadly in line with Morgan Stanley’s revised figure and above Citi’s 2,870p target, suggesting a degree of consensus around fair value even as ratings diverge.

Goldman seemingly agrees with Citi in arguing that the market has overestimated the threat AI poses to Relx’s business model, while Morgan Stanley’s more cautious stance reflects concern that the stock’s recent performance has left less margin for error.

Relx shares closed Wednesday’s session at 2,436p, down 1.5%. The stock has declined 19.3% so far this year.