Kepler Cheuvreux has included Relx on its Sector Most Preferred List, while reaffirming a buy recommendation and setting a target price at 3,905 pence. This move follows a stock price retreat driven by investor anxieties over potential disruptions from artificial intelligence (AI), which the broker now deems excessive.
Despite a significant valuation contraction observed in 2025, Relx's decline was notably less severe than that experienced by peer Wolters Kluwer, as evidence mounts that AI initiatives are accelerating growth rather than undermining business fundamentals.
The brokerage increased its projected organic revenue growth estimates, adjusting to 6.1% for 2026 and 6.2% for 2027 from prior forecasts of 5.9% and 6.0%, respectively. These upgrades were bolstered by reduced risks related to U.S. federal funding within Relx's Scientific, Technical & Medical (STM) segment.
Likewise, margin forecasts were improved to 35% in 2026 and 34.9% in 2027, driven by optimistic outlooks in both STM and Exhibitions divisions, as detailed in Kepler's January 22 report.
Investor concerns have concentrated on AI's potential to disrupt Relx's Legal and STM arms, especially in areas such as research discovery. Nevertheless, Kepler pointed out concrete advancements generated by AI applications in Legal, which has progressed to third-generation AI products.
Approximately 60% of Legal division revenues now derive from analytics, a substantial increase from 20% recorded in 2021. This segment's like-for-like revenue growth has accelerated to about 8%, markedly improving upon the roughly 2% growth observed before the pandemic.
Relx's latest offering, the Protégé General AI platform launched in the fourth quarter of 2025, integrates LexisNexis+ AI and Protégé solutions into a unified system. It utilizes 14 third-party AI models and adopts a language-model-agnostic framework introduced early in 2023, ahead of competitors by around 18 months.
These AI-driven enhancements have propelled consistent double-digit rises in average client spending, with pricing strategies focused on value and contracts typically spanning three years. Multi-year subscriptions account for about 85% of Legal revenues, facilitating gradual growth as renewals occur at increased price points.
Kepler noted that AI deployment has not substantially increased costs; instead, unit costs are decreasing. The cost per large language model (LLM) transaction dropped 24% year-on-year, while an estimated 30% of new code is now generated by AI, yielding productivity improvements estimated between 20% and 30%.
In the STM sector, Relx plans to debut LeapSpace, a comprehensive AI-powered research platform, in the first quarter of 2026. This platform builds on ScienceDirect AI and Scopus AI foundations and accesses a knowledge base exceeding 100 million records and 15 million peer-reviewed articles. LeapSpace will replace ScienceDirect AI for existing customers automatically.
The Risk division demonstrates resilient performance, with over 90% of its revenues stemming from machine-to-machine solutions embedded in client workflows. High switching costs and strong customer retention underscore this division's stability.
Relx has confirmed its full-year 2025 guidance, forecasting around 7% like-for-like revenue growth. The company, with a market capitalization near £54 billion, trades at approximately 20.9 times forecasted earnings for 2026, representing a 15% to 20% discount relative to Wolters Kluwer. Free cash flow is projected at £2.75 billion for 2026, implying a yield of roughly 5.2%, alongside a forecast dividend yield of 2.4%.