ShoreCap ups Informa to 'buy'
By Iain Gilbert
Date: Friday 13 Dec 2019
(Sharecast News) - Analysts at Shore Capital raised their rating on events and publishing company Informa from 'hold' to 'buy' on Friday, stating the group's acquisition of UBM had established it as the leading player in the global exhibitions industry.
With a substantial portfolio of more than 900 events across "a well-diversified" range of sectors and geographic markets, Shore Cap said it liked the fact that quality events were now delivering strong cash flow and revenue visibility that was not subject to the "disruptive digital influences experienced across other media channels".
Shore Cap also said it expects GDP+ growth revenue across the international events industry and believes that Informa will be well-placed to participate in future consolidation by plugging complementary acquisitions into its substantial infrastructure.
Looking beyond its exhibitions business, Shore Cap thinks the group's other activities also offer a combination of steady and predictable progress and improving momentum and growth following concerted investment and reorganisation.
Shore Cap, which issued the group a 775p target price, highlighted that its positive view on Informa's prospects was supported by its ten-month update which demonstrated its "inherent resilience" and described a solid trading performance with underlying revenue ahead 2.8% year-on-year.
"More broadly, we remain positive on the quality and scale of Informa's core B2B brands and the organic growth and cash generation/debt reduction that they should deliver despite on-going uncertainty on the UK's post-Brexit trading arrangements," said Shore Cap.
"We have long viewed its stock as a core long-term Media sector holding and following recent share price weakness regard its valuation as undemanding."
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