Here is what the investment firm Exane Paribas has to say about the Elsevier boycott. I believe the second paragraph is bullshit when it comes to "scientists' improving perception of Elsevier" or scientists "boycotting" the boycott. It's quite likely that the current boycott will not hurt Elsevier's bottom line, but the real point is not to punish it economically, but to declare our emancipation from doing unpaid work for free and then buying it back at high prices. Still, it's interesting to see that we made its share prices drop.

Please find our 8 page report on Reed Elsevier released this morning. We argue that:

Noise around boycott against Elsevier offers short term trading opportunity

Reed Elsevier was the worst performing media stock last week. We believe this is due to investor concerns on the back of T. Gowers' petition to boycott publishing and refereeing in Elsevier's journals. We believe the share price reaction was overdone and recommend buying the shares.

Scientists are boycotting the boycott

Similar petitions in favour of Open Access were organised in 2000 and 2007, with no impact on Elsevier's fundamentals. Our tracking not only shows that this latest petition lags behind the two preceding ones but also suggests that its momentum is slowing. Fewer than 5,000 scientists have signed up, whereas Elsevier works with more than 6m scientists worldwide. The low take-up of this petition is a sign of the scientific community's improving perception of Elsevier.

Open Access unlikely to hurt financials in the medium term and is priced in

The proportion of Open Access is growing at less than 1% pa. Elsevier's contract lengths are getting longer and the company's growth efforts are focused on new products rather than pricing. Open Access is unlikely to hurt Elsevier in the next five years and the longer term risk is more than priced in, in our view.

Results are due on 16 February

We expect EPS11e of 47p, slightly ahead of the consensus 46p, and an outlook supportive of the group's defensive growth profile and improved fundamentals. The announcement of a new CFO and a possible share buyback could be two additional positives. Reed Elsevier PLC trades on EV/EBIT12e of 8.8x. It offers defensive growth at a reasonable price. We remain buyers of the stock on the current share price weakness.
Shared publiclyView activity