GlobalData PLC (LON: DATA)

GlobalData PLC (LON: DATA) is an FTSE AIM 100 quoted Company, which provides market data intelligence services. It has been serving over 4,000 clients, including Companies across various industries.

The ex-dividend date for the final dividend is 31 March 2022, while the proposed dividend will be paid on 29 April 2022.

Rationale for Valuation – SPECULATIVE BUY at GBX 1,208.00

• Dividend Growth: Following the final dividend of 13.2 pence in FY21, the Company reported a 14% yoy increase in the total dividend.
• Financial Growth: DATA has delivered strong FY21 business performance with significant growth in top-line revenue and bottom-line profitability.
• Strong Operational Progress: The attractiveness of the information services has given the potential of delivering strong financial and operating performance going forward. Meanwhile, the introduction of a single Platform operating model is likely to accelerate organic and inorganic growth opportunities.
• Acquisition Benefits: The strategic progress made through M&A (acquisitions of the Life Sciences business of IHS Markit, LMCA Holdings Limited and LMCI Holdings Limited) in the Q4 FY21 shall augment the solid organic growth.
• Better Profitability: Over the last two interim results, GlobalData has maintained significantly higher profitability margins, as EBITDA margin and the net margin remained higher than the industry median of 19.6% and 7.4%, respectively.
• Technical Indicator: From a technical standpoint, 14-day RSI (~42.93) is in the oversold territory, while the stock price is hovering close to the lower standard deviation of the Bollinger Band.

Key Risks

• Interest Rate Hike: The Federal Reserve announced a first interest rate hike (by 0.25%) in over three years and indicated seven rate hikes in 2022.
• Ukraine Tension: The mounting concern over the Russian invasion in Ukraine can continue to weigh on the equity market.
• Record UK Inflation: The annual rate of UK consumer price inflation reached 5.5% in January 2022, the highest since March 1992. Thus, it can adversely impact the London equities.
  

FY21 Financial Highlights (for the 12 months ended 31 December 2021, as of 28 February 2022)

 (Source: Company Filings)

• Revenue Growth: The Company’s revenue grew by around 6% during FY21 when compared with the prior-year levels.
• Profitability: The profits before tax jumped 14% and reached £32.6 million, an increase from £28.6 million in 2020.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis done by Kalkine Group)

Valuation Methodology: Price/Earnings Approach (FY22) (Illustrative)

*Peers: YouGov PLC, Dianomi PLC, and 4imprint Group PLC.

*All selected peers are LSE-listed Companies from the Media sector.  

 Conclusion

Based on the strong trading, revenue guidance, accelerated growth strategy, and favourable valuation conducted above, we have given a “SPECULATIVE BUY” stance on GlobalData PLC at the current price of GBX 1,208.00 (as of 17 March 2022, at 9:04 AM GMT), with lower double-digit upside potential based on 34.90x Price/NTM Earnings (approx.) on FY22E earnings per share (approx.).

Please note markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Note 3: Dividend Yield may vary as per the stock price movement.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’ 

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

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