LSE:LSE

Stock Analysis Report

Executive Summary

London Stock Exchange Group plc engages in market infrastructure business primarily in the United Kingdom, Italy, France, the United States, and internationally.

Rewards

Earnings are forecast to grow 15.99% per year

Risk Analysis

No risks detected for LSE from our risk checks.


Snowflake Analysis

Limited growth with questionable track record.


Similar Companies

Share Price & News

How has London Stock Exchange Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LSE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.3%

LSE

1.6%

GB Capital Markets

-0.4%

GB Market


1 Year Return

89.5%

LSE

29.8%

GB Capital Markets

6.6%

GB Market

Return vs Industry: LSE exceeded the UK Capital Markets industry which returned 27.7% over the past year.

Return vs Market: LSE exceeded the UK Market which returned 6.2% over the past year.


Shareholder returns

LSEIndustryMarket
7 Day3.3%1.6%-0.4%
30 Day12.0%5.1%-1.7%
90 Day26.0%12.4%5.4%
1 Year91.6%89.5%33.0%29.8%12.4%6.6%
3 Year184.6%174.3%76.6%64.1%18.5%3.4%
5 Year261.8%240.6%128.5%101.5%35.8%4.7%

Price Volatility Vs. Market

How volatile is London Stock Exchange Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is London Stock Exchange Group undervalued compared to its fair value and its price relative to the market?

61.93x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: LSE (£85.42) is trading above our estimate of fair value (£42.41)

Significantly Below Fair Value: LSE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: LSE is poor value based on its PE Ratio (61.9x) compared to the Capital Markets industry average (21.3x).

PE vs Market: LSE is poor value based on its PE Ratio (61.9x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: LSE is poor value based on its PEG Ratio (3.9x)


Price to Book Ratio

PB vs Industry: LSE is overvalued based on its PB Ratio (8.6x) compared to the GB Capital Markets industry average (1.5x).


Next Steps

Future Growth

How is London Stock Exchange Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

16.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LSE's forecast earnings growth (16% per year) is above the savings rate (0.5%).

Earnings vs Market: LSE's earnings (16% per year) are forecast to grow faster than the UK market (12.2% per year).

High Growth Earnings: LSE's earnings are forecast to grow, but not significantly.

Revenue vs Market: LSE's revenue (3.2% per year) is forecast to grow slower than the UK market (3.5% per year).

High Growth Revenue: LSE's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LSE's Return on Equity is forecast to be low in 3 years time (18.7%).


Next Steps

Past Performance

How has London Stock Exchange Group performed over the past 5 years?

25.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LSE has high quality earnings.

Growing Profit Margin: LSE's current net profit margins (15.9%) are lower than last year (22.1%).


Past Earnings Growth Analysis

Earnings Trend: LSE's earnings have grown significantly by 25.8% per year over the past 5 years.

Accelerating Growth: LSE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LSE had negative earnings growth (-20.1%) over the past year, making it difficult to compare to the Capital Markets industry average (15.5%).


Return on Equity

High ROE: LSE's Return on Equity (14.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is London Stock Exchange Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: LSE has a low level of unsold assets or inventory.

Debt Coverage by Assets: LSE's debt is covered by short term assets (assets are 398.8x debt).


Financial Institutions Analysis

Asset Level: LSE's level of assets compared to its equity is very high.

Allowance for Bad Loans: Insufficient data to determine if LSE has a sufficient allowance for bad loans.

Low Risk Liabilities: LSE reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if LSE has an acceptable proportion of non-loan assets held.

Low Risk Deposits: LSE has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if LSE has an appropriate level of bad loans.


Next Steps

Dividend

What is London Stock Exchange Group's current dividend yield, its reliability and sustainability?

0.71%

Current Dividend Yield


Dividend Yield vs Market

company0.7%marketbottom25%1.8%markettop25%5.1%industryaverage2.0%forecastin3Years1.0%

Current dividend yield vs market & industry

Notable Dividend: LSE's dividend (0.71%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.82%).

High Dividend: LSE's dividend (0.71%) is low compared to the top 25% of dividend payers in the UK market (5.15%).


Stability and Growth of Payments

Stable Dividend: LSE is not paying a notable dividend for the UK market, therefore no need to check if payments are stable.

Growing Dividend: LSE is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: LSE is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LSE's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average management tenure


CEO

David Schwimmer (41yo)

1.5yrs

Tenure

UK£2,153,000

Compensation

Mr. David A. Schwimmer has been Group Chief Executive Officer and Executive Director at London Stock Exchange Group Plc since August 01, 2018. He served as a European Managing Director of Goldman Sachs Gro ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD2.79M) is below average for companies of similar size in the UK market ($USD4.71M).

Compensation vs Earnings: Insufficient data to compare David's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
David Schwimmer
Group CEO & Executive Director1.5yrsUK£2.15mno data
David Warren
Group CFO & Executive Director7.6yrsUK£3.44mno data
Raffaele Jerusalmi
Executive Director9.7yrsUK£3.05m0.015% £4.5m
David Shalders
Group COO & Chief Integration Officer0.08yrsno datano data
Anthony McCarthy
Group Chief Information Officer0.08yrsno datano data
Paul Froud
Head of Investor Relations0yrsno datano data
Catherine Johnson
Global General Counsel0yrsno datano data
Victoria Brough
Head of Corporate Communications and Media Relations9.4yrsno datano data
Caroline O'Shaughnessy
MD and Global Head of Sales & Marketing and Information Services0yrsno datano data
Claire Dorrian
Head of London & Southern Region0yrsno datano data

1.5yrs

Average Tenure

55yo

Average Age

Experienced Management: LSE's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
David Schwimmer
Group CEO & Executive Director1.5yrsUK£2.15mno data
David Warren
Group CFO & Executive Director7.6yrsUK£3.44mno data
Raffaele Jerusalmi
Executive Director9.7yrsUK£3.05m0.015% £4.5m
Paul Heiden
Senior Independent Director4.9yrsUK£163.00k0.0011% £325.1k
Donald Robert
Independent Chairman0.8yrsno data0.0029% £853.0k
Jacques Alfred Aigrain
Independent Non-Executive Director6.8yrsUK£120.00k0.00040% £119.3k
Valerie Rahmani
Independent Non-Executive Director2.2yrsUK£109.00kno data
Stephen O'Connor
Independent Non-Executive Director6.7yrsUK£105.00kno data
Andrea Sironi
Independent Non-Executive Director3.3yrsUK£229.00kno data
Ruth Wandhöfer
Independent Non-Executive Director1.3yrsUK£15.00kno data

4.1yrs

Average Tenure

58.5yo

Average Age

Experienced Board: LSE's board of directors are considered experienced (4.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

London Stock Exchange Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: London Stock Exchange Group plc
  • Ticker: LSE
  • Exchange: LSE
  • Founded: 1698
  • Industry: Financial Exchanges and Data
  • Sector: Diversified Financials
  • Market Cap: UK£29.826b
  • Shares outstanding: 349.17m
  • Website: https://www.lseg.com

Number of Employees


Location

  • London Stock Exchange Group plc
  • 10 Paternoster Square
  • London
  • Greater London
  • EC4M 7LS
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LSELSE (London Stock Exchange)YesOrdinary SharesGBGBPJul 2001
LS4CDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2001
LDNX.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2001
LSELBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJul 2001
LSE NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJul 2001
LNST.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDNov 2015
LS4DDB (Deutsche Boerse AG)UNSPONSORED ADRDEEURNov 2015

Biography

London Stock Exchange Group plc engages in market infrastructure business primarily in the United Kingdom, Italy, France, the United States, and internationally. The company operates in six segments: Information Services, Post Trade Services – LCH, Post Trade Services – CC&G and Monte Titoli, Capital Markets, Technology Services, and Other. It operates a range of international equity, bond, and derivatives markets, including London Stock Exchange; Borsa Italiana; MTS, a European fixed income market; and Turquoise, a pan-European equities multilateral trading facility. The company provides capital formation, intellectual property, and risk and balance sheet management services; financial indexing, benchmarking, and analytic services; data and research services; and post trade and risk management, clearing house, and custody and settlement services. The company also develops and operates technology solutions, including trading, market surveillance, and post trade systems for organizations and exchanges; and offers information and data products, such as indexes and benchmarks, real time pricing data, product identification, reporting, and reconciliation services, as well as network connectivity and server hosting services. In addition, it provides market information services comprising indices, market data and statistics, real time data, and regulatory news; education and training, events space, and studio hire services; and capital markets technology and services, trading solutions, technical services, infrastructure solutions and services, and market connectivity, as well as operates data centers and trading venues. Further, the company licenses capital markets and related IT infrastructure. London Stock Exchange Group plc was founded in 1698 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 21:13
End of Day Share Price2020/02/19 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.