Bernstein Research has cut its growth forecasts for professional publishing companies, saying that the sector will suffer the same post-recession “hangover” it did following the great 2001 crash.
Bernstein says public companies in the sector – comprising Pearson, Thomson Reuters (NYSE: TRI), Reed Elsevier (NYSE: RUK) and Wolters Kluwer – will see only three percent revenue growth between 2011 and 2014, compared with the 2005-2008 average of 4.8 percent.
Still, that is not particularly a horror show – growth is growth, and this de-rating is not as pronounced as, say, that recently given to the UK economy.
Bernstein reckons Reed Elsevier’s stock price could rise by up to 30 percent if management broke up the company, though it actually expects only continued pruning. But it fancies Pearson’s increasing strength in U.S. digital education services.
The firm last week poured scepticism on European media stocks, which it thinks are incapable of matching up to U.S. online rivals and are spending too much trying.