Narrow-Moat Wolters Rides the Tailwinds in Q3

Narrow-moat Wolters Kluwer’s trading update for the first nine months of the year reads well. Organic revenue growth hit 6%, driven by pent-up demand for non-recurring services, and operating profit rose by 14% on a constant currency basis. Investors will also be heartened to see management raise full year guidance for EPS growth, from high single-digit to low double-digit growth. Although we will likely tweak our near-term estimates on the back of these additional data points, we do not expect this to have a material effect on our EUR 61 fair value estimate. We believe the shares sit firmly in overvalued territory