UBS has raised its target price for Reed Elsevier from 770p to 790p and reiterated its 'buy' rating for the stock ahead of the publishing and exhibitions group's full-year results later this month.

The broker forecasts revenues of £6,172m for the 2012 financial year, up from £6,055m previously, while earnings per share (EPS) are expected to rise from 43.37p to 50.3p, broadly in line with consensus estimates.

However, UBS said that a key focus for the market will be on management's outlook comments for 2013 and further ahead.

"We expect management to highlight continuing improvements in operating momentum this year across most divisions, which may focus attention on the EPS growth they consider feasible medium-term (vs consensus 6.0%), reflected in the new LTIP targets that are to be set in 2013."

Meanwhile, the broker said that cash returns are "accelerating" and there could be an announcement of an ongoing buy-back programme of up to £400m per annum to maintain leverage.

UBS believes that the stock - trading at 12.6 times earnings - is still "inexpensive" in spite of the re-rating over the second half of last year.

Shares were up 1.8% at 707p by 11:01 on Tuesday.

BC

Related share prices
Reed Elsevier (REL) share price