Reed Elsevier Faces Single-Digit Annual Growth

Solid first-half results demonstrate the value of Reed Elsevier's journals segment but we still believe annual growth rate will remain in the low single digits

Michael Corty, CFA 1 August, 2011 | 1:56PM
Facebook Twitter LinkedIn

Reed Elsevier (REL) delivered solid first-half results that were on par with our expectations. Our fair value estimate remains the same and we believe the shares are fairly valued at the current price. Based on the results and management's outlook, we still project low-single-digit growth for the full year for this business services conglomerate.

The company generated 1% organic growth with positive trends in each of its business lines when the biennial exhibitions are excluded. The Elsevier journals segment (33% of overall sales) reported modest 2% underlying growth, with science and technology's 4% growth outpacing flat top-line results for health sciences. Management noted that the funding environment continues to be mixed with variations between customers and geography. We continue to believe the journals business is Reed Elsevier's crown jewel, given its strong competitive position.

For the entire note and research report, click here.

Morningstar's Equity Analyst Notes and Equity Research Reports contain our independent view on a company's investment case, valuation, financial health and stewardship, and are available to Premium subscribers.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Michael Corty, CFA  Michael Corty, CFA, is an equity analyst with Morningstar.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures