London Stock Exchange Group PLC (LSE:LSEG) remains a "show me" story for investors, who are awaiting proof of execution on management’s growth ambitions, particularly in Data & Analytics.
This is the current verdict from UBS, which said the first indicators of successful execution are expected with Q1 results in April.
Ahead of full-year results due on 26 February, UBS gives LSEG a 'buy' rating with a 12-month price target at 11,000p, unchanged despite making some tweaks to its 2025-27 earnings estimates.
The markets division is expected to see strong Q4 interest rate swap volumes at LCH and improved Tradeweb forecasts, offset by slightly higher depreciation and amortisation, along with minor FX-related revenue adjustments.
LSEG management has guided to a 5.8% annual subscription value (ASV) for the fourth quarter, higher than the 5.6% in Q3 but down from 6.3% at the end of 2024.
UBS noted that ASV had become less reliable as a forward indicator for revenue growth following recent fluctuations.
The Swiss bank values the shares at 21 times 2027 earnings per share, which is below the long-term average of 24x.