RELX PLC (LON: REL) shares fell sharply on Thursday after Morgan Stanley stripped the data analytics giant of its Overweight rating, citing stretched valuation and intensifying competition from AI-powered workflow startups.
The investment bank downgraded RELX to Equal Weight from Overweight and slashed its price target to 2,970 pence from 3,320 pence, triggering a 6.2% decline in the company’s London-listed shares.
Morgan Stanley’s analysts argued that the risk/reward at current share levels has become more balanced, pointing to the rapid scaling of workflow-focused startups as a growing competitive threat to RELX’s core Legal and Risk divisions. The note adds fresh fuel to a debate that has weighed on the stock for months, with shares already down nearly 50% from their recent highs amid broader investor concern that AI disruption could erode RELX’s proprietary data advantage.
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The timing of the downgrade is notable. Just weeks ago, RELX reported a strong set of full-year 2025 results — underlying revenue grew 7%, adjusted operating profit rose 9%, and adjusted earnings per share climbed 10% at constant currency.
The company also announced a £2.25 billion share buyback for 2026 and raised its full-year dividend by 7% to 67.5 pence per share, extending its streak of consecutive annual dividend increases to 15 years.
Bulls argue that RELX’s moat remains intact. Over 90% of its Risk division revenue flows from machine-to-machine interactions, its Lexis+ AI platform has seen its enterprise customer base more than double in the past year, and its credit ratings sit firmly in investment-grade territory at A3/A-.
Yet with the stock now trading at a forward P/E of roughly 20x — well below its five-year average of 32x — Morgan Stanley’s message is clear: the easy money has been made, and the road ahead is less certain.
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