Goldman Sachs Is Bullish On Relx: Why It's A Generative AI Play

Shares of Relx PLC RELX were climbing on Wednesday.

The company is “well positioned on generative AI to strengthen its existing data and IP competitive advantage,” according to Goldman Sachs.

The Relx Analyst: Lisa Yang upgraded the rating for Relx from Neutral to Buy, while raising the price target from £30.46 (@$37.02) to £34.05 (@$41.38).

The Relx Thesis: The application of GenAI across the company’s product suite could accelerate revenue growth, “particularly in Legal with Lexis+ AI,” leading to margin expansion through operating leverage, Yang said in the upgrade note.

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“Overall, we raise our group organic growth by c.30bps on average across 2024-27 and more importantly expect continued gradual acceleration in organic growth to c.7% (ex exhibitions) by 2026 from c.6% currently, which should drive further multiple rerating,” the analyst wrote.

She added the stock “provides good fundamental value given the defensive and recurring nature of revenues, and the improving growth profile driven by the ongoing shift towards more sophisticated data analytics products and upside potential from generative AI.”

RELX Price Action: Shares of Relx had risen by 3.06% to $34.33 at the time of publication Wednesday.

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