London Stock Exchange Group : Gearing up for stronger growth in D&A, further multiples re-rating expected
We have become increasingly constructive on LSEG’s investment case as the company is gearing up for stronger growth in the data business and underlying margin expansion. The risk profile is also improving, with capex set to normalise and with leverage at 1.5x at end-2025. LSEG has proven to be a very strong compounder, with 12.8% estimated adj.EPS CAGR in 2024-2027 and c.3% total shareholder return. We upgrade our recommendation to Outperform given the positive risk-reward, and lift our TP to £130 (from £110).London Stock Exchange Group is a global markets infrastructure business based in the United Kingdom. Co's operating segments include: Information Services, which provides a range of information and data products including indexes and benchmarks; Post Trade Services LCH, which provides clearing services through which counterparty risk is mitigated across multiple asset classes; Capital Markets, provides access to capital for domestic and international businesses and electronic platforms for secondary market trading of equities, bonds and derivatives; and Group Technology, which provides secure technologies to customers that require performance at high levels of availability and throughput.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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