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Pearson out in the cold as Deutsche Bank takes a shine to information providers

The information publishing sector is in rude health, according to Deutsche Bank
Data, data, data
Professional services firms are more willing to spend on new products

Deutsche Bank has taken a look at European information providers and come away impressed.

The bank's publishing sector specialist Mark Braley has eschewed watching the World Cup, preferring to meet or speak with a wide range of professional information executives and concluded that the vast majority of professional information markets remain healthy, supported by improving fundamentals.

READ: UBS cuts RELX to ‘sell’

“In a mid-late cycle environment, professional services firms are more willing to spend on new products and B2B [business-to-business] marketing, while companies are launching new work-flow tools, with the cost of development coming down,” Deutsche Bank said.

The bank has 'buy' recommendations for Relx PLC (LON:REL) – the company formerly known as Reed Elsevier – and Ascential PLC (LON:ASCL) but recommends selling Pearson PLC (LON:PSON), despite increasing the latter's target price to 574p from 525p.

Deutsche has a target price of 1,820p on Relx, up from 1,750p previously, while the price target for Ascential has been bumped up to 460p from 425p.

READ: Ascential acquires digital marketing business WARC ahead of revamped Cannes Lions Festival

Shares in Ascential currently trade at 451.4p, down 1.2p on the day, while Pearson currently trades at 913.8p (up 14.4p) and Relx at 1,688p (up 30p).

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Pearson plc Timeline

October 21 2015

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