The London Stock Exchange Group has been assessed as ‘fairly priced’ prior to its third-quarter results

2 min read | October 09, 2024 03:13 AM PDT | By Team Kalkine Media

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The London Stock Exchange Group has been assessed as ‘fairly priced’ prior to its third-quarter results — Image source: Shutterstock

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Highlights:

London Stock Exchange Group PLC receives a minor upgrade from Deutsche Bank ahead of its upcoming quarterly earnings report.
Deutsche Bank forecasts organic revenue growth exceeding 8% for the third quarter, driven by strong performance in Tradeweb and data businesses.
The share price target for LSEG has been raised from 9,200p to 9,700p, reflecting an extension of the valuation to 2026.

London Stock Exchange Group PLC {LSE:LSEG} has received a modest upgrade from Deutsche Bank in advance of its quarterly earnings report scheduled for 24 October. Analyst Benjamin Goy indicated optimism regarding the company’s upcoming third-quarter results, projecting “good” performance based on current market dynamics.

Goy forecasted organic revenue growth of over 8% for the third quarter, attributing this growth primarily to continued strong performance at Tradeweb and robust activity within the data businesses. However, he noted that well-flagged non-recurring impacts, such as the termination of Euronext clearing, are expected to weigh on growth within the Post Trade segment.

In light of these factors, Deutsche Bank has adjusted its estimates downward by approximately 2% to 4%, primarily due to the strengthening of the British pound. Goy characterized LSEG’s stock as “largely fairly priced,” trading at 24 times forward price to earnings. Despite this valuation, the share price target was raised from 9,200p to 9,700p, reflecting a rolling out of the valuation to 2026.

At the start of Wednesday’s trading, LSEG shares were observed at 10,220p, indicating that market participants remain engaged with the stock as the earnings report approaches. This upgrade from Deutsche Bank highlights the potential for continued growth within LSEG, particularly in its Tradeweb and data operations, amid a fluctuating economic landscape. The upcoming earnings report will provide further insight into the company's financial health and strategic direction as it navigates the challenges and opportunities present in the capital markets.

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