RELX PLC

RELX's first-half results were broadly in line with FactSet consensus, and 2026 guidance was maintained. Shares traded flat on July 23.

Why it matters: RELX continued to deliver incrementally better results, with first-half underlying growth rising to 10% for legal and 6% for scientific, technical, and medical, while risk maintained its consistent 8% growth rate. STM is benefiting from continued strong growth in article submissions (up 20%) and the rollout of new artificial intelligence-driven products, such as Scopus AI and Leapspace. Growth in the law firms and corporate legal subsegment was reported to be in the double digits, indicating continued success with the rollout of artificial intelligence-driven products such as Lexis+ with Protégé.

The bottom line: We maintain our fair value estimate of GBX 4,200, $57, and EUR 48 for wide-moat RELX. The shares look deeply undervalued. RELX shares are down significantly from their 2025 peak after getting caught in the sell-off of information services amid the AI-disruption narrative. We think its wide moat is secure, and it will benefit from AI through enhanced opportunities for product innovation.

Coming up: 2026 guidance is for another year of strong underlying growth in revenue, EBIT, and EPS on a constant-currency basis. 2026 guidance by segment includes strong revenue growth and EBIT growth exceeding revenue growth in risk, STM, and legal. Exhibitions is expected to have strong revenue growth with an improvement in EBIT margin.

For details on the threat of generative AI on RELX's legal businesses, please see our Jan. 6 report, 'AI Fears Overshoot Reality; Wide Legal Moats Are Firmly Intact.'

Our fair value estimate for RELX is $57 per share, implying a 2026 P/E ratio of 29 times.

We expect high-single-digit organic revenue growth and a modestly increasing adjusted operating margin reaching the mid-30s over our explicit forecast.

We think the risk segment will continue to be the growth leader due mainly to its fast-growing solutions for financial crime compliance, digital fraud, and identity confirmation, but it will also benefit from expanding into adjacencies on the insurance side, such as property and commercial. In the scientific, technical, and medical segment, we expect growth to be driven by the ongoing shift to analytics and decision-making tools, AI-based product innovation, plus continued strong growth in article submissions in the primary research business. The legal segment’s revenue growth should also benefit significantly from the shift to analytics and AI-based product innovation. We expect normalized mid-single-digit revenue growth in the exhibitions segment now that it has fully recovered from the pandemic.

RELX has a diversified portfolio of high fixed-cost businesses in mainly mature markets. We expect the operating margin to rise incrementally from the benefits of scale and as the company improves efficiency through continuous process innovation.

We think RELX has a wide moat based on intangible assets, switching costs, and a cost advantage. Historical return on invested capital (including goodwill) has run mid- to high-teens, and we expect it to rise above 20% in our forecast period.

RELX's three largest segments: risk, scientific/technical/medical (STM), and legal, are similar and share the same moat sources. Exhibitions, the smallest segment, doesn't fit this mold; it organizes major trade shows and conferences (e.g., London Book Fair, JCK, New York Comic Con) and has a narrow moat from brand intangibles. Aside from pandemic years, EBIT margins have held near 25% with moderate capital intensity, as many events are "must-attend" fixtures that draw repeat attendance year after year.

In the three major segments, intangible assets stem from unique curated databases built over decades, often the recognized authority in their field. Replicating these would take enormous time and cost, and even a comparable database would face user inertia favoring incumbents—a formidable barrier to entry.

Switching costs relate to that same inertia. RELX's products typically cost under 1% of a customer's total cost base, reducing the incentive to search for alternatives—especially for lifelong users of these tools. Costs have risen further as offerings shift toward analytics and software deeply embedded in customer workflows; the effort to learn a new system and the disruption of ripping out mission-critical software deter switching for small savings. RELX doesn't disclose retention, but we believe it's typically in the mid-to high-90s—strong evidence of switching costs.

The shift toward analytics and workflow software has made scale in research and development increasingly critical, forming a cost-advantage pillar of the moat. Product development spending appears mostly as capital expenditures, though some flows through the P&L as often-undisclosed R&D. Because businesses within each segment are similar, R&D built for one area often transfers to others. Reflecting this, roughly one-third of RELX's global employees work in technology, half of them software engineers.

Capex trends support the scale argument: larger companies spend more in absolute dollars but less as a percentage of sales. RELX, the largest player, spends roughly 4%-5% of sales on capex; Wolters Kluwer spends 5%-6%; the smaller Clarivate spends 8%-9%. This shows up in ROIC, where Clarivate lags well behind despite arguably the highest margins. RELX doesn't disclose R&D as a P&L line, but Wolters reports around 10% of sales; we suspect RELX spends somewhat less, given its greater scale.

Risk is RELX's largest segment by revenue, with nearly 40% operating margins and moderate capital intensity. RELX claims the number-one position across its key verticals. Insurance and business services each contribute roughly 40%-45% of segment revenue.

Insurance supplies risk-assessment tools for underwriting, pricing, and claims, concentrated in US auto (75% of the business). RELX's data and workflow tools are mission-critical here, aided by its CLUE Auto database—launched in 1987 as the first contributory claims-history database for US auto insurance and still the industry standard. Like other contributory databases underpinning wide-moat firms (Experian, Equifax, TransUnion, Verisk), value compounds with scale: customers must contribute data to join, making the database progressively harder to replicate and pulling new entrants toward the incumbent for cost and quality reasons.

Business services help clients, often banks, verify customer identity, physically and digitally, and meet compliance needs like KYC and anti-money-laundering rules. It also supports credit-risk assessment in the US alternative credit market. Because these tools serve mission-critical compliance functions, we see switching costs as high.

STM is a close second in size, with similar near 40% margins and moderate capital intensity, and RELX claims a global number-one position in generally concentrated underlying markets. Primary research (roughly half of segment revenue) and databases/tools/references (about 40%) are the main businesses.

Primary research reflects Elsevier's 2,800-plus peer-reviewed journals, the industry's largest portfolio. Elsevier holds an 18% share of articles published—nearly double its nearest rival—and a higher 28% share by citations, signaling strong journal quality. Since publishing in respected, high-reach journals is central to researchers' careers, submissions to leading titles remain consistently strong, and top journals rarely change (The Lancet has led general/internal medicine for over 200 years). We view these journals as hard-to-replicate intangible assets.

Databases, tools, and electronic references turn RELX's datasets into workflow analytics. Scopus, an abstracts-and-citations database, competes essentially only with Clarivate's Web of Science. Trusted citation data is essential for researchers finding prior work and collaborators, and it's also used by institutions and funders to evaluate performance and allocate funding.

Legal is the third-largest segment, with roughly 20% EBIT margin and relatively high capital intensity, providing legal, regulatory, and analytics tools to law firms, corporates, government, and academia. Its Lexis platform ranks second in North America, where the market is essentially a duopoly with Thomson Reuters (Westlaw), which is about 25% larger by segment revenue. Intangible assets come from unique historical datasets (some no longer collectible) and legacy content brands like Shepard's and Matthew Bender, which have built decades of customer loyalty. Reference material still makes up roughly 75% of revenue, and this heavier reference weighting, plus pressure from its larger rival, likely explains the segment's lower margin. However, fast-growing analytics and decision-support tools are now embedded at key workflow points to help predict outcomes, shape litigation strategy, and select contract language. These tools save lawyers significant time, and we think this is raising switching costs as reliance on them grows.

The shift to focusing on analytics and decision tools has boosted RELX’s organic growth profile.

RELX is the biggest player in an industry where scale is becoming increasingly important.

RELX consistently rewards shareholders with a consistent package of dividend increases and share buybacks.

While RELX is the number-two player in the concentrated US legal information market, the legal segment still has materially lower margins than its other segments.

The push toward open-access research may eventually hinder growth in RELX’s journal business.

The exhibitions business is more cyclical and lacks synergies with the rest of the company’s operations.