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The Bank of England raised interest rates today and signaled more hikes are coming to fight inflation, which it expects to reach nearly 5 percent next year. For a company like RELX, higher rates can be a double-edged sword. While it has a lot of debt, most of its revenue comes from steady, multi-year subscriptions that tend to hold up well even when the economy slows down.
The bigger thing to watch is how this affects the company's borrowing costs. RELX uses debt to fund its steady stream of buybacks and smaller acquisitions. If interest rates stay high for a long time, it will cost more to manage that debt, which could leave less cash for returning to shareholders.
Source: Bloomberg Markets and Finance
RELX's risk division launched Accurint One, a new platform designed to help law enforcement agencies search through massive amounts of data more efficiently. The tool uses governed AI, which is artificial intelligence built with strict rules to ensure accuracy and privacy, to help investigators connect dots across different data sets in one place.
This launch is a clear example of how the company is using its specialized data to build more valuable software. By making its tools more central to how police departments work, RELX can charge higher subscription fees and make its services harder for customers to replace.
Source: PRNewsWire
Citigroup analysts lowered their rating on the company this week. This is a notable shift because Citigroup is a widely followed firm, and moving to a neutral rating suggests they see less room for the stock to grow from its current price.
While the business itself remains steady, the stock has risen about 20 percent over the last three months. This move likely reflects a view that much of the company's success in building AI tools for legal and scientific data is already reflected in the share price.
Source: Citigroup
UBS analysts kept their buy rating and a price target of 3,600p, noting that the stock has fallen about 17 percent this year due to fears that AI might replace its tools. The bank argues these risks are overstated because the company owns the specialized data that AI models need to be accurate, particularly in legal and risk research.
This supports our view that the company's proprietary data sets are a competitive edge rather than a liability. While the stock has been weak lately, the business continues to shift more of its revenue toward high-margin digital analytics that are difficult for free AI tools to replicate.
Source: Proactive Investors
A new study from LexisNexis Risk Solutions, a division of RELX, found that the cost of managing fraud in government benefit programs has hit a five-year high. For every dollar lost to fraud, agencies now spend about $4.29 on things like investigations and recovery efforts.
This matters because it highlights the growing demand for the high-end data and analytics RELX sells. As fraud becomes more expensive and difficult for governments to manage on their own, they are more likely to pay for the specialized software tools RELX provides to verify identities and catch errors before payments are made.
Source: PRNewsWire
Management has a steady habit of clearing their own bars, with small beats and consistent double-digit growth showing they have a firm handle on the business.
| Expectation | |
|---|---|
| EPS | $0.92 |
| Revenue | $6.83B |