The London Stock Exchange Group PLC (LSE: LSEG) is anticipated to make a major upgrade to its growth objectives in the upcoming investor presentations this autumn. It may allocate its increasing funds towards strategic acquisitions or further extend its share buyback initiatives.
This prediction comes from JPMorgan as they look forward to the ‘Capital Markets Day’ presentations scheduled for November.
The investment bank’s analysts have highlighted the stock, noting three primary factors. The foremost is the expected substantial uplift in revenue growth projections due to the momentum in Data and analytics. This was amplified by the Refinitiv acquisition two years prior, further strengthened by a partnership with Microsoft in the previous year.
While JPMorgan’s projections currently only slightly exceed the general City consensus, they believe there is potential for greater revenue once the Microsoft partnership’s contributions are fully factored in.
Additionally, with LSEG shares currently priced around 24% lower than other data-centric businesses – despite having similar predicted earnings growth – analysts anticipate this “valuation discrepancy” to decrease. This expectation is reinforced by the diminished risks associated with shareholding from Blackstone and Reuters, especially following recent block sales.
Lastly, the focus is on capital utilization. The potential lies in strategic acquisitions that could enhance revenue or, if not, a continuation of share buybacks.
Considering these factors, the analysts have revised their share price prediction to 9,920p from its recent closing price of 8,366p.
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