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Investing.com -- Bernstein has upgraded Wolters Kluwer (AS:WLSNc) to “outperform” from “market perform” and set a new price target of €140, down from the previous €160, in a note dated Monday.
Shares of the Dutch company were up 1.6% at 06:31 ET (10:31 GMT).
The analysts said the “risk / reward trade-off has shifted to attractive upside” after a summer sell-off in professional information provider shares that was driven by renewed concerns about artificial intelligence disruption.
The brokerage noted that AI-related fears, particularly in Clinical Solutions, triggered what Bernstein called an “extreme” derating.
The analysts said the extra three price-to-earnings turns lost in the sell-off meant “a -€3.5bn value hit, vs OpenEvidence mid-July $3.5bn valuation, or a ‘pre-concerns’ Clinical Solutions Bern €6bn value.”
Bernstein acknowledged the leadership transition as another investor concern but downplayed its weight.
“The CEO transition “risk”, magnified when the CEO is new to the business, or the company has been under-performing, or has a stretched balance sheet. None of this applies to WKL in our view, and incoming CEO S. Caywood has strong credentials,” the analysts said. They added that risk perception should decrease closer to the effective transition date.
The brokerage also emphasized Wolters Kluwer’s product mix and investments in new technology.
The analysts said the company has “higher exposure to workflow tools” and highlighted the roll-out of “several agentic solutions in development or in customer beta programs” as supportive of growth.
As a result, Bernstein raised its free cash flow yield target range by 50 basis points to 3.5%-4.5%.