Citi cuts LSEG stock price target to GBP130, maintains Buy

Published 23/04/2025, 08:36
Citi cuts LSEG stock price target to GBP130, maintains Buy

On Wednesday, Citi analyst Andrew Coombs revised the price target for London Stock Exchange Group Plc (LON:LSEG:LN) (OTC: LNSTY) to £130.00, down from £135.00, while sustaining a Buy rating on the stock. With a market capitalization of $81.4 billion and trading near its 52-week high, InvestingPro analysis suggests the stock is currently fairly valued. The adjustment comes ahead of the company’s first-quarter trading update scheduled for May 1, 2025, which is anticipated to focus solely on revenue disclosure.

Coombs forecasts that the trading update for the first quarter of 2025 will show an income of £2.26 billion before recoveries and cost of goods sold (COGS), aligning with the Visible Alpha consensus. The estimate includes projections that are consistent with consensus for Capital Markets due to stronger Equities performance offset by weaker Foreign Exchange (FX) results. Additionally, the analyst anticipates Post Trade revenues to exceed expectations by 5%, driven by robust SwapClear volumes, while Data & Analytics is projected to fall short by 1% due to workflow-related issues. The FTSE Russell segment is also expected to underperform by 2% following the loss of an ETF mandate, with Risk Intelligence forecasts remaining in line with consensus.

Coombs noted that the company is unlikely to provide updates on forward guidance at this time. However, he mentioned the Annual Subscription Value (ASV) is seen at approximately 6.4%, a slight increase from 6.3% at the end of 2024. Despite this, the ASV is considered a volatile metric at this point in time.

The analyst expressed a continuing positive outlook on the long-term investment thesis for LSEG, despite acknowledging that the company’s revenues are now less cyclically geared compared to its peers. He also pointed out the lack of clear near-term catalysts moving forward for the stock.

In other recent news, London Stock Exchange Group Plc (LSEG) has seen varied analyst activity following its fiscal year 2024 financial results. JPMorgan analyst Enrico Bolzoni raised the price target for LSEG to GBP139.00, citing robust earnings and an optimistic outlook for future earnings per share. Bolzoni also highlighted the company’s strategy to achieve an EBITDA margin greater than 50% by 2026 and noted a £500 million share buyback program as an indicator of strong cash flow. Meanwhile, UBS analysts maintained a Buy rating with a GBP135.00 price target, emphasizing the value added by LSEG’s partnership with Microsoft (NASDAQ:MSFT). They project a significant gain in share value under a Microsoft Upside Scenario, although financial benefits from the partnership are expected to materialize by 2026.

In contrast, BNP Paribas (OTC:BNPQY) Exane analyst Gregory Simpson lowered the price target to GBP116.00, maintaining a Neutral rating due to foreign exchange considerations. Simpson noted that while LSEG’s initiatives with Microsoft and artificial intelligence are notable, they are not expected to significantly alter revenue growth in the near term. These recent developments reflect varied analyst perspectives on LSEG’s financial performance and strategic initiatives. Investors are likely to monitor LSEG’s progress closely, particularly regarding its partnerships and strategic rollouts.

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