Broker tips: Rightmove, Relx

(Sharecast News) - Analysts at Barclays sounded a cautious note on shares of Rightmove, pointing out how they were continuing to trade at a premium to the second-tier index even in face of slower growth.Investors looking for exposure to growth should do so elsewhere, the broker said.For starters, the property website's latest full-year numbers were not "clean", posting a small beat on earnings per share, but only thanks to New Home Developments.As well, the number of UK agents had fallen during the back half of the year and the situation was likely to worsen, alongside stagnant online agent penetration and clear end-market pressures on bricks and mortar."Taking a step back, this remains a very high-quality business in a tough market, in our view. But growth is slowing - we forecast 7% EBIT growth and 9% EPS growth post buyback this year, and there is no earnings momentum," Barclays said.In terms of valuation, the shares were on an estimated 2020 price-to-earnings multiple of 22.0 times, in-line with its historical average against the FTSE 250 "despite markedly slowing growth" and the likes of AutoTrader on 19.0 times earnings.The broker kept its recommendation on Rightmove at 'underweight' and its target price for 420p.Analysts at Deutsche Bank, on the other hand, were more upbeat, telling clients that concerns about competition chipping away at Rightmove's leadership position were misplaced.However, the German bank which reiterated its 'buy' rating on Rightmove, conceded that the New Homes arm was "a less predictable revenue stream", which meant markets were treating it with greater caution, despite what sounded like a strong outlook for the unit.Analysts at Berenberg reiterated their 'buy' rating on analytics firm Relx on Monday, arguing that the fall in the group's share price on Friday was "overdone".News late on Thursday that the University of California had not renewed its subscription with Dutch scientific publisher Elsevier, a Relx subsidiary, sent shares south on the next day, but Berenberg felt the news did not "remotely merit the share price reaction"."While the University of California may be a well-known institution, and the news of its dispute with RELX is thus considered significant, in reality, its relative importance underlines what Relx management said at results," said Berenberg.The University of California paid Relx roughly $11m in 2018, equating to just 0.3% of the Scientific, Technical and Medical division's revenues, a figure that would disappear in rounding, according to the analysts."In other words, while the university is an important academic institution, its importance to RELX is diluted by the fact that the group has thousands of other clients."Berenberg also said Friday's share price movement represents "a somewhat rare opportunity" to build a position in a "quality blue-chip compounder".The German broker estimated that Relx will deliver more than 4% of organic revenue growth in 2019, coupled with steady margin expansion driven by the group's strategy of keeping cost inflation below revenue growth."The stock is meaningfully less expensive than peer Wolters Kluwer, but also looks cheap versus staples which offer lower growth," said Berenberg, which also reiterated its price target of 1,850p on Relx.