RELX PLC (LON:REL) Just Released Its Half-Yearly Earnings: Here's What Analysts Think

It's been a good week for RELX PLC (LON:REL) shareholders, because the company has just released its latest half-yearly results, and the shares gained 4.0% to UK£36.08. Revenues came in 2.2% below expectations, at UK£4.6b. Statutory earnings per share were relatively better off, with a per-share profit of UK£0.94 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for RELX

After the latest results, the eleven analysts covering RELX are now predicting revenues of UK£9.64b in 2024. If met, this would reflect a satisfactory 3.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 4.0% to UK£1.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£9.74b and earnings per share (EPS) of UK£1.07 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of UK£38.78, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on RELX, with the most bullish analyst valuing it at UK£42.50 and the most bearish at UK£35.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that RELX's rate of growth is expected to accelerate meaningfully, with the forecast 7.3% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect RELX to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at UK£38.78, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on RELX. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple RELX analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - RELX has 1 warning sign we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com