UBS has reiterated its 'buy' rating on London Stock Exchange Group PLC (LSE:LSEG) and set a price target of £140, seeing the recent share price weakness as a buying opportunity.
Over the past three weeks, LSEG shares have dropped 8%, underperforming the STOXX 600 index and European exchange peers.
UBS attributes this decline to the departure of Satvinder Singh, head of the Data & Analytics division, as well as profit-taking by investors and a lack of immediate catalysts ahead of the company's full-year results.
Despite recent struggles, UBS believes the outlook for LSEG remains strong. The firm expects management to reaffirm existing guidance, including a projected 100 basis point increase in earnings margins for 2025 and 2026.
While new guidance is not anticipated, UBS suggests that clarity on key issues—such as the search for a new head of Data & Analytics, cash flow generation, and capital distribution plans—could help restore confidence.
LSEG has a history of rebounding after earnings releases, with shares rising between 6% and 11% in the 30 days following its last four results. UBS expects a similar pattern, seeing considerable upside potential with limited downside risk.
At 24 times projected 2026 earnings, UBS believes the valuation is attractive given its forecasted 15% annual earnings growth through 2027.
The shares were flat at 11,130p.