JP Morgan has maintained its overweight rating on Informa, the FTSE 100 events and publishing group, arguing that the planned separation of its Taylor & Francis academic publishing division will sharpen the company's equity story and create a significant value unlock.
The bank values Taylor & Francis at around £2.7 billion, based on a range of 9 to 12 times forecast 2027 earnings before interest, tax, depreciation and amortisation.
Proceeds from a sale or stock market listing of Taylor & Francis are expected to be used primarily for debt reduction, with scope for a resumed share buyback programme once leverage falls.
JP Morgan has lifted its 2027 revenue, operating profit and adjusted earnings per share forecasts by 12%, 14% and 3% respectively following Informa's acquisition of events business Clarion, with adjusted earnings per share now forecast at 68.1p.
The bank sees earnings per share accretion of 8% by 2029 as cost synergies from the Clarion deal are realised.
Together, the Clarion acquisition and the Taylor & Francis exit position Informa as a scaled, faster-growing pure-play business-to-business platform, with JP Morgan forecasting compound annual earnings growth of 9% between 2027 and 2029.
Management is targeting live events revenue growth of more than 7% annually from 2027 onwards, a target JP Morgan views as credible given improving execution and a simplified operating structure.
The bank acknowledges escalating tensions in the Middle East and Riyadh as a near-term risk to watch, given Informa's significant exposure to events in the region.
At 9.6 times forecast 2027 enterprise value to EBITDA, JP Morgan argues the risk-reward looks attractive for a business repositioning as a higher-quality growth compounder that has yet to receive full credit from the market.
