RELX stock price target raised to $57 at CFRA

On Tuesday, CFRA analyst Firdaus Ibrahim updated the price target on RELX shares, listed on the New York Stock Exchange (NYSE:RELX), to $57, up from the previous target of $54. The firm maintained its Buy rating on the stock. The adjustment reflects a positive outlook based on the company’s enhanced growth profile. Currently trading at $50.86, RELX has demonstrated strong momentum with a 21.6% return over the past year. InvestingPro analysis reveals the stock has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength.

The rationale behind the new price target is linked to a projected price-to-earnings (P/E) ratio of 35.5 times for the year 2025. This valuation implies a 43% premium over the three-year average forward P/E of 24.9 times. CFRA’s assessment is influenced by the company’s robust performance and anticipated growth.

RELX’s financial results show a notable acceleration in revenues, which reached £9.4 billion for the year 2024, surpassing the previously estimated £9.2 billion. This represents an underlying growth rate of 7%. Operating profit also exceeded expectations, climbing to £2.9 billion, or an adjusted £3.2 billion, compared to the forecasted £2.7 billion or adjusted £3.0 billion, respectively. The company maintains impressive gross profit margins of 65.02% and boasts a market capitalization of $94.37 billion. InvestingPro subscribers can access 15 additional key insights about RELX’s financial health and valuation metrics.

The strong financial performance is attributed to increased demand for RELX’s analytics and decision tools, as well as the integration of new artificial intelligence capabilities. All business segments of the company reported significant growth, with Risk and Legal sales rising by 8% and 7%, respectively. The Science, Technical & Medical (TASE:PMCN) (STM) segment saw a growth of 4%, and Exhibitions grew by 11%.

In line with the company’s financial success, shareholder returns are also on the rise. CFRA notes that the dividends for the year 2024 have been increased to 63.0 pence per share, up from 58.8 pence. Additionally, RELX is planning share buybacks totaling £1.5 billion for the year 2025.

CFRA’s outlook for RELX remains optimistic, with the expectation that the company’s sustained growth and profitability will continue to drive higher returns for shareholders. The company has maintained dividend payments for 34 consecutive years, with a current dividend yield of 2.19%. According to InvestingPro’s comprehensive analysis, RELX maintains a "GOOD" overall financial health score, though current valuations suggest the stock may be trading above its Fair Value.

In other recent news, RELX Plc has been highlighted for its potential growth by BofA Securities. Analyst David Amira has increased the price target for the company’s shares and reiterated a Buy rating, identifying RELX as one of the firm’s top investment ideas. Among the reasons for this positive outlook are expectations for above-consensus growth in two of RELX’s divisions and its potential as a defensive growth compounder.

Amira has outlined five key themes supporting this outlook. These include accelerated growth in the Legal division and the Science, Technical and Medical (STM) division. The potential upside in the Risk division and the possibility of underestimated share buybacks by the consensus are also noted.

The final theme is the potential for a material rerating of RELX. A rerating is anticipated to eliminate the current discount RELX has compared to its US peers. These recent developments, as reported by BofA Securities, suggest a robust growth trajectory for RELX in the coming years.

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