On Monday (NASDAQ:MNDY), Deutsche Bank (ETR:DBKGn) initiated coverage on Springer Nature AG (SPG:GR) shares, a prominent academic publisher, assigning the stock a Buy rating and setting a price target of EUR29.00. The firm's analysis highlighted Springer Nature's significant presence in the academic publishing industry, where it holds a 14% market share of total academic journal articles published.
The analyst pointed out that for the fiscal year 2024 estimates, Springer Nature is expected to generate 75% of its revenue and 88% of its adjusted operating profit from its Research division. Within this division, Journals contribute 77%. The geographical revenue distribution for the company is 42% from the Europe, Middle East, and Africa (EMEA) region, 33% from the Americas, and 25% from the Asia-Pacific (APAC) region.
The transition to digital has been successful for the industry according to Deutsche Bank, and now, with the advent of Open Access and generative AI, there are additional tailwinds expected to propel growth. The historical market growth from 2019 to 2023 was about a 2.5% compound annual growth rate (CAGR), with the Research divisions of listed academic publishers experiencing an average like-for-like growth of 3% over the years 2021-23.
Looking forward, Deutsche Bank forecasts a continuation of steady low single-digit industry growth. This projection is based on the consistent performance of the academic publishing sector and the new opportunities that digital transformation and technological advancements present.
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