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.

Expansion into AI-driven analytics, cloud-based data delivery, and strategic partnerships positions LSEG for recurring revenue growth and operating leverage.
Advancements in compliance solutions and digital assets enable LSEG to diversify offerings, increase margins, and strengthen its market leadership.
Disruptive technologies, fierce competition, pricing pressures, regulatory risks, and volatile revenue models threaten LSEG's growth, margins, and long-term earnings visibility.

Catalysts

About London Stock Exchange Group

Provides financial markets infrastructure and delivers financial data, analytics, news, and index products to customers in the United Kingdom and internationally.What are the underlying business or industry changes driving this perspective?

The accelerated rollout of new AI-driven analytics tools, the integration of Workspace with Microsoft Teams and Office, and the transition to cloud-based and usage-based data delivery position LSEG to monetize the ongoing explosion in demand for real-time data, advanced analytics, and digital workflows, supporting recurring revenue acceleration and operating leverage.
Ongoing global expansion of data sets, such as company fundamentals and private markets, coupled with strategic partnerships (UBS, StepStone, Microsoft), is expected to strengthen LSEG's international footprint and capture rising cross-border investment flows, driving subscription revenue and diversifying growth.
Heightened regulatory complexity and growing demand for compliance and risk management solutions-especially in areas like financial crime, digital identity, and fraud prevention-provide an expanding market for LSEG's differentiated, high-trust data and Risk Intelligence offerings, boosting high-margin revenue streams.
Successful completion of the Refinitiv integration, workforce insourcing, widespread adoption of AI process automation, and disciplined cost control have delivered significant margin expansion and are expected to further reduce capital intensity, underpinning sustained improvements in net margins and cash flow.
The emergence of new digital asset classes, tokenization infrastructure, and regulated private securities markets allows LSEG to innovate with new trading venues and data offerings, capturing new revenue streams and leveraging industry consolidation to reinforce its market-leading position.

London Stock Exchange Group Earnings and Revenue Growth

London Stock Exchange Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming London Stock Exchange Group's revenue will grow by 6.1% annually over the next 3 years.
Analysts assume that profit margins will increase from 10.8% today to 16.3% in 3 years time.
Analysts expect earnings to reach £1.8 billion (and earnings per share of £3.5) by about September 2028, up from £988.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting £2.0 billion in earnings, and the most bearish expecting £1.4 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 47.0x on those 2028 earnings, down from 49.2x today. This future PE is greater than the current PE for the GB Capital Markets industry at 12.6x.
Analysts expect the number of shares outstanding to decline by 0.16% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.76%, as per the Simply Wall St company report.

London Stock Exchange Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The rise of decentralized finance (DeFi), blockchain-based trading, and alternative private capital markets poses a long-term threat to LSEG's core infrastructure-driven revenues, as clients may increasingly bypass traditional exchanges and listing venues, potentially eroding revenue from equity listings and transaction fees.
Intensifying data and analytics competition, especially as fintechs and alternative data providers leverage cloud and AI, creates downward pricing pressure and could undermine LSEG's ability to command premium subscription rates, slowing organic revenue growth and impacting net margins.
Sustained aggressive discounting and pricing pressure from established competitors are already causing higher cancellations and lower average subscription value growth, potentially compressing net margins and limiting future earnings expansion if LSEG is unable to sufficiently differentiate offerings.
Regulatory uncertainty-including data localization, cross-border data restrictions, and evolving transparency requirements-increases compliance costs and could restrict LSEG's access to certain international markets, limiting both top-line revenue growth and net earnings.
The accelerating shift toward usage-based models from traditional subscription contracts, while creating opportunities, also introduces risk of greater revenue volatility; if LSEG fails to win or retain large data-intensive clients, or if macroeconomic or industry trends slow transactional volumes, this could negatively impact recurring revenues, margin stability, and overall earnings visibility.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of £124.815 for London Stock Exchange Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of £135.0, and the most bearish reporting a price target of just £112.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be £10.9 billion, earnings will come to £1.8 billion, and it would be trading on a PE ratio of 47.0x, assuming you use a discount rate of 8.8%.
Given the current share price of £92.82, the analyst price target of £124.82 is 25.6% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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