LSEG: Future Data Partnerships Will Drive Medium-Term Upside Potential

Analysts have made a modest downward adjustment to their price target on London Stock Exchange Group, trimming it by roughly GBP 0.25. They are balancing slightly lower fair value and discount rate assumptions against marginally higher revenue growth and profit margin expectations.

Analyst Commentary

Recent Street research reflects a generally constructive stance on London Stock Exchange Group, with higher targets from several major houses partially offset by more conservative revisions from others. The mix of upward and downward adjustments underscores a debate around the pace of execution and how much of the growth story is already reflected in the share price.

Bullish Takeaways

• Bullish analysts have raised price targets into the mid to high 13,000 GBp range, signalling confidence that the group can deliver above market growth from its data and analytics businesses.
• Upward revisions from firms such as JPMorgan suggest that recent operational delivery and integration progress support a higher earnings base and justify a premium valuation.
• The maintenance of positive ratings alongside higher targets indicates that, in the bullish camp, upside potential is seen as intact despite the stock's strong performance year to date.
• Bullish analysts point to resilient recurring revenue and operating leverage as key drivers that could sustain double digit earnings growth over the medium term.

Bearish Takeaways

• Bearish analysts have trimmed price targets in incremental steps, highlighting concern that expectations for margin expansion and cost efficiencies may now be close to fully priced in.
• Recent downward revisions in the 12,700 to 12,800 GBp range reflect a more cautious view on the near term pace of revenue growth and the risk of softer market related activity.
• Some bearish analysts emphasise that, even with solid fundamentals, the current valuation leaves a narrower margin of safety if execution on technology and product rollouts were to slip.
• The divergence between the highest and lowest targets underlines uncertainty around longer term growth assumptions, particularly in data monetisation and cross selling, which could cap multiple expansion if not met.

What's in the News

• LSEG announced a strategic partnership with Nasdaq to distribute institutional grade private markets intelligence via Workspace and Datafeeds, integrating Nasdaq eVestment private markets datasets and select exclusive benchmarks into LSEG's ecosystem to enhance transparency and decision making in private investments (Key Developments).
• The Nasdaq collaboration builds on LSEG's launch of the UK's first Private Securities Market in September 2025 and reinforces its ambition to expand private market infrastructure and deepen coverage across fund and deal level data (Key Developments).
• LSEG unveiled a collaboration with Anthropic that grants Claude for Financial Services customers access to LSEG licensed data from products such as Workspace and Financial Analytics, positioning this as a core milestone in the LSEG Everywhere AI strategy (Key Developments).
• The Anthropic partnership is designed to deliver secure, scalable, LLM agnostic AI in financial services through open protocols such as MCP, enabling automation of financial analysis and faster deployment while supporting mutual lead generation between LSEG and Anthropic (Key Developments).

Valuation Changes

• Fair Value edged down slightly from £123.09 to £122.84, reflecting a modest reduction in the intrinsic value estimate.
• Discount Rate decreased marginally from 8.97% to 8.94%, implying a slightly lower required return in the valuation model.
• Revenue Growth ticked up fractionally from 5.92% to 5.92%, signalling a very small uplift in medium term growth expectations.
• Net Profit Margin increased modestly from 16.06% to 16.34%, indicating improved profitability assumptions over the forecast horizon.
• Future P/E declined from 48.03x to 47.05x, pointing to a slightly less demanding valuation multiple applied to forward earnings.