RELX Exhibits Some Rare Signs of Pain

For the first time in four years RELX's interim results didn’t contain the words “strong or robust” when describing operational performance over the period. Instead we were treated to an explanation of how its three largest businesses, STM, risk and business analytics, and legal, which together generate 84% of group revenues, are all holding up fine. This is, of course, to say that exhibitions is not doing so well. Revenues here collapsed by 70% year over year. Of course, analysts and the market had known well that this business would likely be experiencing disruption as a result of the coronavirus pandemic, but an operating loss in this division for the half year is an outcome that not many would have forecast. We will continue to revise our near-term estimates as the situation unfolds; however, we do not expect this to have a material impact on our investment recommendation nor our narrow moat rating. With the stock hovering just above our GBX 1,615 fair value estimate, we believe the shares remain fairly valued.