Stock of the Day

October 27, 2021

Relx (RELX)

$39.05
+$0.63 (+1.6%)
Market Cap: $68.23B

About Relx

RELX Plc engages in provision of information and analytics solutions for professional and business customers across industries. It operates through the following business segments: Scientific, Technical & Medical; Risk & Business Analytics; Legal; and Exhibitions. The Scientific, Technical & Medical segment is a global information analytics business that helps institutions and professionals advance healthcare, open science, and improve performance for the benefit of humanity. The Risk & Business Analytics segment provides customers with solutions and decision tools that combine public and industry specific content with advanced technology and analytics to assist them in evaluating and predicting risk and enhancing operational efficiency. The Legal segment is a global provider of legal, regulatory and business information and analytics that helps customers increase productivity, improve decision-making and outcomes and advance the rule of law around the world. The Exhibitions segment is an event business, enhancing the effect of face-to-face through data and digital tools. The company was founded by Albert Edward Reed in 1903 and is headquartered in London, the United Kingdom.

Relx Bull Case

Here are some ways that investors could benefit from investing in Relx Plc:

  • Relx Plc recently announced a GBP 125 million share buyback program, signaling management's confidence in the company's value and providing a potential floor for the stock price, which currently trades at $35.25.
  • Major financial institutions have recently upgraded their outlooks, with Zacks Research raising its rating to "Strong-Buy" and Bank of America increasing its price target to GBp 4,000, reflecting growing optimism about the company's earnings prospects.
  • UBS has argued that market fears regarding artificial intelligence overstate the threat to Relx Plc's core Legal and Risk divisions, suggesting that the current valuation may be undervalued relative to the company's improving earnings outlook.
  • The company maintains a consistent dividend yield of 1.66%, offering investors a steady income stream while they wait for potential capital appreciation from the recent analyst upgrades.
  • Relx Plc operates in the Professional Services industry with a diversified portfolio across Scientific, Technical & Medical, Risk & Business Analytics, and Legal segments, providing resilience against sector-specific downturns.

Relx Bear Case

Investors should be bearish about investing in Relx Plc for these reasons:

  • Relx Plc recently cut its dividend from $0.6559 to $0.2785, a significant reduction that may disappoint income-focused investors and signal potential cash flow pressures or a shift in capital allocation strategy.
  • The company carries a high debt-to-equity ratio of 5.23, indicating substantial leverage that could limit financial flexibility and increase risk during periods of economic uncertainty or rising interest rates.
  • Short interest has increased significantly, with shares shorted rising to 6,707,402 in the most recent reporting period, suggesting that a notable portion of the market remains skeptical about the stock's near-term performance.
  • Relx Plc's current ratio of 0.45 and quick ratio of 0.40 are well below 1.0, indicating that the company may face challenges meeting its short-term obligations with its available liquid assets.
  • Despite recent upgrades, the stock has experienced volatility, including a gap down of 1.72% on September 15, 2026, and remains below its 52-week high of $47.22, reflecting ongoing market uncertainty about its valuation.

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