LSE:ERM

Stock Analysis Report

Euromoney Institutional Investor

Executive Summary

Euromoney Institutional Investor PLC, together with its subsidiaries, operates as a business-to-business information company in the United Kingdom, North America, and internationally.

Rewards

Trading at 56.4% below its fair value

Earnings are forecast to grow 27.25% per year

Pays a reliable dividend of 4.1%

Risk Analysis

Dividend of 4.1% is not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Profit margins (7.8%) are lower than last year (26.7%)



Snowflake Analysis

Flawless balance sheet with reasonable growth potential and pays a dividend.


Similar Companies

Share Price & News

How has Euromoney Institutional Investor's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ERM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

11.9%

ERM

11.1%

GB Media

10.0%

GB Market


1 Year Return

-34.7%

ERM

-35.4%

GB Media

-23.0%

GB Market

Return vs Industry: ERM matched the UK Media industry which returned -33.8% over the past year.

Return vs Market: ERM underperformed the UK Market which returned -22.7% over the past year.


Shareholder returns

ERMIndustryMarket
7 Day11.9%11.1%10.0%
30 Day-25.2%-29.0%-17.6%
90 Day-37.9%-43.3%-27.3%
1 Year-33.0%-34.7%-32.7%-35.4%-18.9%-23.0%
3 Year-16.7%-22.9%-42.9%-50.2%-12.9%-24.2%
5 Year-19.9%-29.2%-43.1%-54.8%1.6%-21.8%

Price Volatility Vs. Market

How volatile is Euromoney Institutional Investor's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Euromoney Institutional Investor undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ERM (£8.08) is trading below our estimate of fair value (£18.53)

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


Price To Earnings Ratio

PE vs Industry: ERM is poor value based on its PE Ratio (43.7x) compared to the Media industry average (17.3x).

PE vs Market: ERM is poor value based on its PE Ratio (43.7x) compared to the UK market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: ERM is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: ERM is overvalued based on its PB Ratio (1.7x) compared to the GB Media industry average (0.8x).


Next Steps

Future Growth

How is Euromoney Institutional Investor forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

27.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ERM's forecast earnings growth (27.3% per year) is above the savings rate (0.5%).

Earnings vs Market: ERM's earnings (27.3% per year) are forecast to grow faster than the UK market (15.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ERM's revenue (14.2% per year) is forecast to grow faster than the UK market (2.6% per year).

High Growth Revenue: ERM's revenue (14.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ERM's Return on Equity is forecast to be low in 3 years time (15%).


Next Steps

Past Performance

How has Euromoney Institutional Investor performed over the past 5 years?

-10.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ERM has a large one-off loss of £11.7M impacting its September 30 2019 financial results.

Growing Profit Margin: ERM's current net profit margins (7.8%) are lower than last year (26.7%).


Past Earnings Growth Analysis

Earnings Trend: ERM's earnings have declined by -10.2% per year over the past 5 years.

Accelerating Growth: ERM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ERM had negative earnings growth (-69.6%) over the past year, making it difficult to compare to the Media industry average (-1.8%).


Return on Equity

High ROE: ERM's Return on Equity (3.8%) is considered low.


Next Steps

Financial Health

How is Euromoney Institutional Investor's financial position?


Financial Position Analysis

Short Term Liabilities: ERM's short term assets (£397.1M) exceed its short term liabilities (£273.2M).

Long Term Liabilities: ERM's short term assets (£397.1M) exceed its long term liabilities (£31.7M).


Debt to Equity History and Analysis

Debt Level: ERM is debt free.

Reducing Debt: ERM has no debt compared to 5 years ago when its debt to equity ratio was 12.8%.

Debt Coverage: ERM has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: ERM has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: ERM has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if ERM's debt is covered by short term assets.


Next Steps

Dividend

What is Euromoney Institutional Investor's current dividend yield, its reliability and sustainability?

4.10%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ERM's dividend (4.1%) is higher than the bottom 25% of dividend payers in the UK market (2.7%).

High Dividend: ERM's dividend (4.1%) is low compared to the top 25% of dividend payers in the UK market (7.3%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (179.2%), ERM's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ERM's dividends in 3 years are forecast to be well covered by earnings (43% payout ratio).


Next Steps

Management

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

1.6yrs

Average management tenure


CEO

Andrew Rashbass (53yo)

4.42s

Tenure

UK£2,328,959

Compensation

Mr. Andrew Rashbass has been the Chief Executive Officer of Euromoney Institutional Investor PLC since November 19, 2015. Mr. Rashbass served as an Executive Chairman of Euromoney Institutional Investor PL ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD2.89M) is above average for companies of similar size in the UK market ($USD1.28M).

Compensation vs Earnings: Andrew's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Rashbass
CEO & Executive Director4.42yrsUK£2.33m0.12% £1.0m
Wendy Pallot
CFO, Member of Management Board & Director1.58yrsUK£654.69k0.00077% £6.7k
Diane Alfano
Member of Management Board & Divisional Director of Institutional Investorno dataUK£360.39kno data
Bashar Al-Rehany
Member of Management Board & Divisional Director of Investment Researchno dataUK£115.89kno data
Raju Daswani
Member of Management Board & Divisional Director of Fastmarketsno datano datano data
Rosalind Irving
Member of Management Board & Divisional Director of Telecomsno datano datano data
Tim Bratton
General Counselno datano datano data
Andrew Pieri
Chief Information Officer & Member of Management Boardno datano datano data
Jeffrey Davis
Member of Management and CEO of Financial & Professional Services1.17yrsno datano data
Nigel Martin
Global HR Director & Member of Management Boardno datano datano data

1.6yrs

Average Tenure

58yo

Average Age

Experienced Management: ERM's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Andrew Rashbass
CEO & Executive Director4.42yrsUK£2.33m0.12% £1.0m
Wendy Pallot
CFO, Member of Management Board & Director1.58yrsUK£654.69k0.00077% £6.7k
Colin Day
Independent Non-Executive Director2yrsUK£60.00kno data
Philippe Van de Walle
Independent Non-Executive Chairman1yrUK£128.33k0.0032% £28.3k
Timothy Pennington
Independent Non-Executive Director0.50yrUK£4.17kno data
Imogen Joss
Independent Non-Executive Director2.33yrsUK£60.00kno data
Lorna Tilbian
Independent Non-Executive Director2.17yrsUK£50.00kno data
Janice Babiak
Senior Independent Director0.50yrUK£50.36k0.0050% £43.7k

1.8yrs

Average Tenure

60yo

Average Age

Experienced Board: ERM's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


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.


Ownership Breakdown

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


Top Shareholders

Company Information

Euromoney Institutional Investor PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Euromoney Institutional Investor PLC
  • Ticker: ERM
  • Exchange: LSE
  • Founded: 1969
  • Industry: Publishing
  • Sector: Media
  • Market Cap: UK£869.709m
  • Shares outstanding: 107.64m
  • Website: https://www.euromoneyplc.com

Number of Employees


Location

  • Euromoney Institutional Investor PLC
  • 8 Bouverie Street
  • London
  • Greater London
  • EC4Y 8AX
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ERMLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
EMYI.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
ERMLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992

Biography

Euromoney Institutional Investor PLC, together with its subsidiaries, operates as a business-to-business information company in the United Kingdom, North America, and internationally. It operates through four segments: Asset Management; Pricing, Data and Market Intelligence; Banking and Finance; and Commodity Events. The Asset Management segment offers independent research, news, and data services for investors under BCA and Ned Davis Research brand names, as well as operates networks and conferences that bring asset allocators and asset managers together. The Pricing, Data and Market Intelligence segment provides information and analysis for business processes and workflows; and operates a price reporting agency for the metals and mining industries, as well as engages in telecoms, insurance, airline, and banking businesses. The Banking and Finance segment offers market intelligence, news, training, and conferences to the finance industry; publishes Euromoney magazine, a publication for the global banking sector; and organizes conferences for specific industry sectors across the Euromoney and IMN brands. The Commodity Events segment includes conferences and trading events in the metals, agriculture, and energy sectors. Euromoney Institutional Investor PLC also engages in property holding activities. The company was formerly known as Euromoney Publications PLC and changed its name to Euromoney Institutional Investor PLC in April 1999. The company was founded in 1969 and is headquartered in London, the United Kingdom. Euromoney Institutional Investor PLC is a subsidiary of DMG Charles Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 21:15
End of Day Share Price2020/03/30 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.