RELX (LSE:REL) - Share price, News & Analysis

Q: What is the Fair Price of REL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

REL (£22.1) is trading below our estimate of [[fair value]] (£32.16)

REL fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	3/6
Past Performance	3/6
Financial Health	3/6
Dividends	5/6

REL Stock Overview

RELX PLC provides information-based analytics and decision tools for professional and business customers in North America, Europe, and internationally.

Rewards

Trading at 31.3% below our estimate of its fair value

Earnings are forecast to grow 9.53% per year

Pays a reliable dividend of 2.25%

Risk Analysis

Has a high level of debt

RELX Competitors

Experian

LSE:EXPN

UK£22.2b

Intertek Group

LSE:ITRK

UK£6.9b

GlobalData

AIM:DATA

UK£1.2b

RWS Holdings

AIM:RWS

UK£1.3b

Price History & Performance

Summary of all time highs, changes and price drops for RELX
Historical stock prices
Current Share Price	UK£22.10
52 Week High	UK£24.74
52 Week Low	UK£19.66
Beta	0.46
1 Month Change	0.14%
3 Month Change	-8.22%
1 Year Change	11.62%
3 Year Change	13.63%
5 Year Change	35.42%
Change since IPO	615.19%

Recent News & Updates

Jun 05

We Think RELX (LON:REL) Can Stay On Top Of Its Debt

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

May 22

RELX PLC (LON:REL) Shares Could Be 23% Below Their Intrinsic Value Estimate

Does the May share price for RELX PLC ( LON:REL ) reflect what it's really worth? Today, we will estimate the stock's...

Apr 22

RELX's (LON:REL) Dividend Will Be Increased To UK£0.35

The board of RELX PLC ( LON:REL ) has announced that it will be increasing its dividend on the 7th of June to UK£0.35...

Shareholder Returns

	REL	GB Professional Services	GB Market
7D	0.2%	0.1%	-1.1%
1Y	11.6%	-6.3%	-9.7%

Return vs Industry: REL exceeded the UK Professional Services industry which returned -6.3% over the past year.

Return vs Market: REL exceeded the UK Market which returned -9.7% over the past year.

Price Volatility

Is REL's price volatile compared to industry and market?
REL volatility
REL Average Weekly Movement	2.8%
Professional Services Industry Average Movement	4.3%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.6%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: REL is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: REL's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1903	33,500	Erik Engstrom	https://www.relx.com

RELX PLC provides information-based analytics and decision tools for professional and business customers in North America, Europe, and internationally. It operates through four segments: Risk; Scientific, Technical & Medical; Legal; and Exhibitions. The Risk segment offers information-based analytics and decision tools that combine public and industry specific content with technology and algorithms to assist clients in evaluating and predicting risk.

RELX Fundamentals Summary

How do RELX's earnings and revenue compare to its market cap?
REL fundamental statistics
Market Cap	UK£42.37b
Earnings (TTM)	UK£1.47b
Revenue (TTM)	UK£7.24b

28.8x

P/E Ratio

5.8x

P/S Ratio

Is REL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
REL income statement (TTM)
Revenue	UK£7.24b
Cost of Revenue	UK£2.56b
Gross Profit	UK£4.68b
Other Expenses	UK£3.21b
Earnings	UK£1.47b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Jul 28, 2022

Earnings per share (EPS)	0.77
Gross Margin	64.63%
Net Profit Margin	20.31%
Debt/Equity Ratio	185.0%

How did REL perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

65%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is REL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for REL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for REL. This is calculated by dividing REL's market cap by their current preferred multiple.
What is REL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£42.37b

REL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	6.7x
Enterprise Value/EBITDA	21.9x
PEG Ratio	3x

Price to Earnings Ratio vs Peers

How does REL's PE Ratio compare to its peers?

REL PE Ratio vs Peers

The above table shows the PE ratio for REL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	29.7x
EXPN Experian	23.2x	9.1%	UK£22.2b
ITRK Intertek Group	23.8x	8.4%	UK£6.9b
DATA GlobalData	46.9x	n/a	UK£1.2b
RWS RWS Holdings	24.9x	12.3%	UK£1.3b
REL RELX	28.8x	9.5%	UK£42.4b

Forward PE

Price-To-Earnings vs Peers: REL is good value based on its Price-To-Earnings Ratio (28.8x) compared to the peer average (29.7x).

Price to Earnings Ratio vs Industry

How does REL's PE Ratio compare vs other companies in the GB Professional Services Industry?

Price-To-Earnings vs Industry: REL is expensive based on its Price-To-Earnings Ratio (28.8x) compared to the UK Professional Services industry average (22.8x)

Price to Earnings Ratio vs Fair Ratio

What is REL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

REL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	28.8x
Fair PE Ratio	48.1x

Price-To-Earnings vs Fair Ratio: REL is good value based on its Price-To-Earnings Ratio (28.8x) compared to the estimated Fair Price-To-Earnings Ratio (48.1x).

Share Price vs Fair Value

What is the Fair Price of REL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: REL (£22.1) is trading below our estimate of fair value (£32.16)

Significantly Below Fair Value: REL is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: REL is poor value based on its PEG Ratio (3x)

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Future Growth

How is RELX forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: REL's forecast earnings growth (9.5% per year) is above the savings rate (0.9%).

Earnings vs Market: REL's earnings (9.5% per year) are forecast to grow slower than the UK market (10.9% per year).

High Growth Earnings: REL's earnings are forecast to grow, but not significantly.

Revenue vs Market: REL's revenue (7.9% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: REL's revenue (7.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: REL's Return on Equity is forecast to be very high in 3 years time (53.5%).

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Past Performance

How has RELX performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-0.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: REL has high quality earnings.

Growing Profit Margin: REL's current net profit margins (20.3%) are higher than last year (17.2%).

Past Earnings Growth Analysis

Earnings Trend: REL's earnings have declined by 0.8% per year over the past 5 years.

Accelerating Growth: REL's earnings growth over the past year (20.2%) exceeds its 5-year average (-0.8% per year).

Earnings vs Industry: REL earnings growth over the past year (20.2%) underperformed the Professional Services industry 46.1%.

Return on Equity

High ROE: Whilst REL's Return on Equity (45.63%) is outstanding, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is RELX's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: REL's short term assets (£2.4B) do not cover its short term liabilities (£3.7B).

Long Term Liabilities: REL's short term assets (£2.4B) do not cover its long term liabilities (£6.9B).

Debt to Equity History and Analysis

Debt Level: REL's net debt to equity ratio (181.5%) is considered high.

Reducing Debt: REL's debt to equity ratio has reduced from 223.4% to 185% over the past 5 years.

Debt Coverage: REL's debt is well covered by operating cash flow (33.8%).

Interest Coverage: REL's interest payments on its debt are well covered by EBIT (15x coverage).

Balance Sheet

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Dividend

What is RELX current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.25%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: REL's dividend (2.25%) is higher than the bottom 25% of dividend payers in the UK market (1.89%).

High Dividend: REL's dividend (2.25%) is low compared to the top 25% of dividend payers in the UK market (5.29%).

Stability and Growth of Payments

Stable Dividend: REL's dividends per share have been stable in the past 10 years.

Growing Dividend: REL's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (65.3%), REL's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (56.9%), REL's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

7.8yrs

Average management tenure

CEO

Erik Engstrom (59 yo)

12.67yrs

Tenure

UK£9,632,000

Compensation

Mr. Erik Engstrom is Independent Non-Executive Director of Smith & Nephew plc since January 1, 2015 and Bonnier Group. He was a Partner at General Atlantic Partners. He has been Chief Executive Officer of...

CEO Compensation Analysis

Compensation vs Market: Erik's total compensation ($USD11.59M) is above average for companies of similar size in the UK market ($USD5.27M).

Compensation vs Earnings: Erik's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: REL's management team is seasoned and experienced (7.8 years average tenure).

Board Members

Experienced Board: REL's board of directors are considered experienced (5.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31