Despite falling around 8% in the last month, RELX (LON: REL) stock is said to look “incrementally attractive” at current levels.
Barclays upgraded RELX from Equal-Weight to Overweight in a note last week, citing its position in the current economic climate.
An analyst at the bank told investors in a note he believes that while RELX has seen some rotation due to investor preference for “European cyclicality and other sectors,” its resilience stands out amidst macroeconomic uncertainty.
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According to Barclays, the potential range for RELX’s group organic growth is between 5.5% and 8.5% over time, assuming no global recession.
The bank believes “it would take multiple years to hit the upper or lower ends of that, given the nature of RELX’s revenue model.”
Furthermore, the analyst believes that “the upside risks are far more likely over time than the downside.”
Even in a severe recession scenario, akin to 2008/2009, Barclays estimates a “potentially see 7% 2026 adjusted EPS downside (excluding FX).”
They explain that this indicates that while not entirely immune, RELX demonstrates a low impact during economic downturns.
While the stock’s valuation, at 27x P/E and a 3.6% FCF yield in 2026, may not be considered “extremely cheap,” Barclays highlights the “extremely high-quality growth for many years to come,” forecasting an average of “just under 11.0% constant FX EPS growth going forward.”
Therefore, Barclays has set a new price target of 4,275p, up from 4,220p. The stock currently trades around the 3,808p mark.
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