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Highlights
- LSEG's data and feeds segment is projected to contribute 23% of top-line growth over the next two years.
- Strategic trends, including cloud migration and data platform advancements, bolster LSEG's market positioning.
- Analysts predict LSEG's data business will underpin the next phase of re-rating for the company.
The London Stock Exchange Group PLC (LSE:LSEG) is poised for significant growth, with its data and feeds business positioned to play a central role in the company’s future trajectory. Analysts at Jefferies have highlighted this segment as a key driver of the FTSE 100 firm’s re-rating journey, projecting it to deliver 23% of top-line growth over the next two years.
Data and Feeds: A Catalyst for Growth
The data and feeds division, encompassing real-time and quantitative market data, stands out as a critical growth engine for LSEG. Unlike other business units such as desktop workflows, the data segment is described as offering "untethered growth," supported by one of the largest and most valuable financial datasets globally.
Jefferies analysts emphasized that this business has the potential to underpin the next phase of LSEG’s market revaluation, which they believe is only halfway complete.
Strategic Trends Align with LSEG’s Strengths
Several emerging trends in the financial data industry align with LSEG’s capabilities, enhancing its market leadership. Among these is the ongoing shift toward cloud migration, a trend in which LSEG has taken significant strides through its collaboration with Microsoft Corp (NASDAQ:MSFT). This partnership is expected to drive increased data consumption and open the door to flexible, usage-based pricing models.
Additionally, the depth and breadth of LSEG's data platform position the company as a leader in data management outsourcing. Advanced technologies integrated within its platform further expand the use cases for its data offerings, providing robust solutions for a diverse range of financial market participants.
Impact on Market Positioning and Valuation
Jefferies analysts believe that LSEG’s focus on its data business will reinforce its leadership in the financial data market. This optimistic outlook is reflected in the bank’s upgrade of LSEG’s share price target from 1,250p to 1,350p.
At the time of analysis, LSEG shares were trading at 1,133p, signaling potential upside as the company capitalizes on its strategic initiatives.
Looking Ahead
As LSEG continues to innovate within its data and feeds division, the company is well-positioned to capture growth opportunities across the financial data market. Its strategic alignment with trends like cloud integration and advanced analytics underscores its commitment to staying at the forefront of industry developments.
Further updates on LSEG’s performance in this segment and its broader market impact are anticipated as the company executes its growth strategy, solidifying its role as a leader in the global financial services ecosystem.
