Earnings Beat: London Stock Exchange Group plc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, London Stock Exchange Group plc (LON:LSEG) recently reported its yearly numbers. Revenues of UK£6.7b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of UK£5.78 an impressive 84% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for London Stock Exchange Group

Taking into account the latest results, the consensus forecast from London Stock Exchange Group's 14 analysts is for revenues of UK£7.46b in 2022, which would reflect a decent 11% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 180% to UK£2.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£7.48b and earnings per share (EPS) of UK£2.67 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of UK£90.43, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values London Stock Exchange Group at UK£110 per share, while the most bearish prices it at UK£75.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that London Stock Exchange Group's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2022 being well below the historical 22% p.a. growth over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 3.1% per year. Factoring in the forecast slowdown in growth, it's pretty clear that London Stock Exchange Group is still expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, they made no changes to their revenue estimates - and they expect sales to perform better than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on London Stock Exchange Group. Long-term earnings power is much more important than next year's profits. We have forecasts for London Stock Exchange Group going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for London Stock Exchange Group that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.