Morgan Stanley Raises IHS Revenue Estimate

Morgan Stanley is raising its revenue estimate on IHS Inc. IHS to $1.3bn from $1.29bn, “but maintaining our adj. EBITDA estimate of $395M.” “IHS just missed our Q2 EPS, as costs from acquisitions pressured margins,” Morgan Stanley writes. “Revenue beat our estimates and FY guidance implies that organic growth should pick up in 2H11, though organic revenue growth came in at 7% (vs. 9% in Q1) and the organic growth rate inherent in the deferred revenue was 12% (vs. 14% in Q1). “Management provided Q3 guidance of $97-$99M in adj. EBITDA, below our previous estimate of $100M and FactSet consensus of $102M. Management remains confident that it can bring margins from acquisitions from the mid-teens range to the mid-20s range by Q4, and to accretive levels in 2012. IHS demonstrated that they have been successful with this at the company's Investor Day.” IHS closed Wednesday at $87.99.