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Investing.com -- The London Stock Exchange Group’s (LON:LSEG) £8 billion market value drop this quarter has created a buying opportunity, RBC Capital Markets analysts say, arguing the selloff on workflow business concerns was disproportionate to its impact on the group.
The bank reiterated its Outperform rating and 13,200p price target.
The recent weakness has been tied to worries over the Workflows segment, particularly slowing annual subscription value growth and potential threats from agentic AI. RBC analyst Ben Bathurst acknowledged “some concern may be rational” but said “the share price reaction has been outsized.”
Workflows, which includes the Workspace desktop platform, accounted for 22% of revenue in the first half of 2025, but RBC estimates it generates only about 11% of group profits and just 8% of total valuation on a peer multiple basis.
The broker’s sum-of-the-parts analysis showed 15% upside for LSEG shares even if Workflows’ profit was valued at zero.
Bathurst pointed to positives from the first-half results, including stronger numbers, higher capital returns and reaffirmed guidance, which it said had been overshadowed by the concerns.
He also noted that LSEG trades at a full-year 2026 (FY26) price-to-earnings (P/E) multiple of 21x, about a 25% discount to data provider peers.
Bathurst sees the upcoming Innovation Forum on November 10 as a chance for management to address AI-related questions and showcase product rollouts from the Microsoft partnership.
He said stable or improving revenue growth for Workflows in the fourth quarter could reassure the market on competitive dynamics.
RBC’s discussions with CEO David Schwimmer and the investor relations team suggested no widespread change in competitive pricing, describing aggressive discounts as “one offs” rather than an industry trend.
Management expressed confidence in the sales pipeline and the long-term relevance of its desktop and data offerings despite emerging AI tools.
“We see an attractive risk/reward at LSEG’s current valuation,” Bathurst said, adding that the discount to peers is “becoming more difficult to justify.”