Informa has 30%+ Upside Potential On Underappreciated Growth Profile

According to Seeking Alpha Informa is currently undervalued compared to its closest peer group by about 30% and may re-rate in the next few months. The company has made a significant business overhaul in the past few years and is now very well positioned to grow sustainably going forward. Despite this profile, its valuation seems to be too cheap and a potential high dividend increase may be the catalyst for a re-rating of its shares.

On a relative basis, it trades at a significant discount to its closest peers, as shown in the next table.

P/E P/BV Div. Yield
Informa 14.3 2.7 2.75
Wolters Kluwer (OTCPK:WTKWY) 17.8 5.0 2.0
Axel Springer (OTC:AXSPY) 21.1 3.2 3.2
Relx NV (RELX) 19.7 5.3 2.4
Pearson (PSO) 14.0 1.4 2.6
Experian (OTCQX:EXPGY) 22.2 7.5 2.0
Average 19.0 4.5 2.44

This means that Informa is currently undervalued, and this doesn’t seem to be warranted due to its good growth prospects justifying a valuation closer to its peer group. If Informa closes its valuation gap to its peer group, it may have upside potential of about 33%.

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