London Stock Exchange Group plc (LSEG.L) | Investment Case

1. Company Snapshot

1.a. Company Description

London Stock Exchange Group plc engages in the market infrastructure business primarily in the United Kingdom, the United States, other European countries, Asia, and internationally.The company operates through three segments: Data & Analytics, Capital Markets, and Post Trade.It operates a range of international equity, fixed income, exchange-traded funds/exchange-trading, and foreign exchange markets, including London Stock Exchange, AIM, Turquoise, CurveGlobal, FXall, and Tradeweb.

The company also provides information and data products, such as indexes, benchmarks, real time pricing data and trade reporting, and reconciliation services, as well as network connectivity and server hosting services; market trading services; and clearing, risk management, capital optimization, and regulatory reporting solutions.In addition, it offers media training, events space, and studio hire services.Further, the company licenses capital markets; installs software; and provides maintenance services.

London Stock Exchange Group plc was founded in 1698 and is headquartered in London, the United Kingdom.

Show Full description

1.b. Last Insights on LSEG

London Stock Exchange Group's recent performance has been impacted by several factors. Analysts have marginally adjusted their price targets, reflecting caution over near-term uncertainties and growth expectations. The company's fair value estimate has seen a minor decrease of about 1.4 percent, signaling a slightly more cautious outlook on its growth prospects. LSEG's partnership with Nasdaq to deliver enhanced private markets data and its collaboration with Anthropic to make financial data more accessible are notable developments. Additionally, the company's sale of a stake in Post Trade Solutions to global banks for £170 million is a significant strategic move.

1.c. Company Highlights

Last Price	8652
Change Percentage	-0.44%
Open	8656
Previous Close	8690
Market Cap ( Millions)	44436
Volume	922070
Year High	12185
Year Low	8094
M A 50	8911.32
M A 200	10142.17

FCF Yield	7.93%
Dividend Yield	1.57%
ROE	4.47%
Debt / Equity	47.24%
Net Debt / EBIDTA	181.71%
Price To Book	2.16
Price Earnings Ratio	46.32
Price To FCF	12.61
Price To sales	4.87
EV / EBITDA	14.17

2. LSEG Reports Strong First-Half 2025 Results

LSEG reported strong first-half 2025 results, with revenue growth of 8.7%, driven by all businesses contributing positively. EBITDA margins expanded by 150 basis points to 49.5%, and adjusted EPS grew over 20% to £2.16, beating estimates of £2.06. The company returned £1 billion to shareholders through buybacks and dividends and invested in future growth. Organic constant currency income growth was 7.8%, consistent across Q1 and Q2.

Publication Date: Aug -03

                                    📋 Highlights
                                    Revenue Growth:
                                                Reported 8.7% revenue growth for the first half of 2025, driven by positive contributions from all businesses.
Margin Expansion:
                                                EBITDA margins expanded by 150 basis points to 49.5%, with adjusted EPS growing over 20% year-on-year.
Shareholder Returns:
                                                Returned £1 billion to shareholders through buybacks and dividends and announced a further £1 billion buyback program.
Organic Growth:
                                                Achieved 7.8% organic constant currency income growth, consistent across Q1 and Q2.
Operational Efficiency:
                                                Delivered strong operating leverage, with adjusted EBITDA growth of 11.2% and free cash flow growth of 43.6%.

                                

Business Segments Performance

By division, Data & Analytics and FTSE Russell performed well, while Risk Intelligence and Markets grew at double-digit rates. Revenue growth was reported across all four businesses. The company raised its margin guidance and announced a further £1 billion buyback and a 15% increase in the interim dividend.

Operating Leverage and Cash Flow

Operating leverage was delivered, with top-line growth translating into higher adjusted EBITDA growth of 11.2%, AOP growth of 13.4%, and APS growth of 21.8%. The effective tax rate decreased to 24.0%, and AEPS was £208.9p, representing a 20.1% year-on-year increase. The company generated strong operating cash flow, with equity free cash flow growth of 43.6%.

Growth Drivers and Investments

The company highlighted four structural growth drivers: generative AI, cloud distribution, regulation, and digital asset classes. It is creating a portfolio of growth opportunities, securing near, medium, and long-term growth through investments in content and capabilities. The company deployed strong equity free cash flow for growth and shareholder returns, including a new £1 billion buyback.

Valuation and Shareholder Returns

At current prices, LSEG trades at a P/E Ratio of 72.26, a P/B Ratio of 2.15, and an EV/EBITDA of 19.06. The stock offers a Dividend Yield of 1.4% and a Free Cash Flow Yield of 6.78%. With a ROIC of 3.05% and ROE of 2.99%, the company's valuation seems to reflect its strong growth prospects and solid financial performance.

Outlook and Guidance

The company is confident in delivering on its 2025 guidance and medium-term plan. The company's organic growth guidance for the year remains unchanged at 6.5-7.5%, despite delivering 7.8% growth in H1. LSEG expects a progressive acceleration of its subscription business and margin progression, driven by pricing, client product usage, growth in clients, and new products.

3. NewsRoom

British Land promoted to FTSE 100 as WPP falls out after nearly three decades

Dec -04

Source:

LSEG to integrate financial data into ChatGPT in AI push

Dec -03

Source:

LSEG Announces New Collaboration with OpenAI

Dec -03

Source:

Nasdaq To Move ‘as Fast as we Can’ on Tokenized Stocks as LSEG Allocates £100M to Blockchain

Dec -01

Source:

London Stock Exchange Group plc - Unsponsored ADR (LSEGY) Upgraded to Buy: What Does It Mean for the Stock?

Nov -28

Source:

Eco (Atlantic) Oil and Gas Ltd. - Q2 2026 Results & SA Block Renamed Block 1 CBK

Nov -19

Source:

How Recent Developments Are Rewriting the Story for London Stock Exchange Group

Nov -16

Source:

M&A Is Back and Surging. Why More Deals Are Coming.

Nov -12

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.90%)

6. Segments

Data & Analytics (excluding Ftse Russell and Risk Intelligence)

Expected Growth: None%

None

Capital Markets (Including Technology Services)

Expected Growth: 6.5%

This segment is expected to grow slower than the global growth hypothesis due to the increasing competition in the post-trade services market.

Post Trade Services

Expected Growth: 6.9%

The growth aligns with the global average as post-trade services are critical infrastructure for financial markets. The steady demand for these services supports a stable growth trajectory.

Ftse Russell

Expected Growth: 8.0%

The expected growth is above the global average due to the strong demand for index-based investment products and the segment's leadership position in this space. The ongoing shift towards passive investment strategies supports this growth.

Risk Intelligence

Expected Growth: 7.2%

The growth is slightly above the global average due to the increasing complexity of financial markets and the corresponding need for advanced risk management solutions. The segment's offerings are well-positioned to meet this demand.

Other

Expected Growth: 6.9%

The expected growth aligns with the global average, reflecting the diverse nature of activities within this segment and their general alignment with the overall business trajectory.

7. Detailed Products

Trading Services

London Stock Exchange Group plc provides trading services that enable buyers and sellers to trade a wide range of financial instruments, including equities, bonds, and derivatives.

Market Data

LSEG offers real-time and historical market data, providing insights and analytics to help customers make informed investment decisions.

Post-Trade Services

LSEG's post-trade services include clearing, settlement, and custody services, ensuring the efficient and secure processing of trades.

Indices and Benchmarks

LSEG offers a range of indices and benchmarks, including the FTSE 100 and Russell Indexes, providing investors with a benchmark for their investment portfolios.

Technology and Infrastructure

LSEG provides technology and infrastructure solutions to support the trading and post-trade needs of its customers.

Capital Markets

LSEG's capital markets business provides a range of services, including IPOs, follow-on offerings, and debt issuance, to help companies raise capital.

8. London Stock Exchange Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for London Stock Exchange Group plc is medium due to the presence of alternative platforms and trading venues, but the company's strong brand and established customer base mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the fragmented nature of the customer base and the lack of concentration among buyers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of a few large suppliers of technology and services, but the company's scale and negotiating power mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including regulatory hurdles and the need for significant investment in technology and infrastructure.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established competitors and the ongoing consolidation in the industry, leading to a highly competitive landscape.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	28.95%
Debt Cost	3.95%
Equity Weight	71.05%
Equity Cost	5.69%
WACC	5.19%
Leverage	40.74%

11. Quality Control: London Stock Exchange Group plc passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

BBVA

A-Score: 7.8/10

Value: 7.1

Growth: 9.2

Quality: 7.0

Yield: 8.1

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

DNB Bank

A-Score: 7.2/10

Value: 6.2

Growth: 4.9

Quality: 5.5

Yield: 9.4

Momentum: 8.5

Volatility: 9.0

1-Year Total Return ->

Generali

A-Score: 7.1/10

Value: 7.7

Growth: 2.8

Quality: 6.1

Yield: 8.8

Momentum: 8.0

Volatility: 9.3

1-Year Total Return ->

Swiss Re

A-Score: 6.6/10

Value: 4.2

Growth: 3.0

Quality: 7.6

Yield: 8.1

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

Deutsche Börse

A-Score: 6.4/10

Value: 4.2

Growth: 7.9

Quality: 7.3

Yield: 3.1

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

LSEG

A-Score: 4.6/10

Value: 2.9

Growth: 7.9

Quality: 5.5

Yield: 1.9

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-4.57%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.19%

London Stock Exchange Group plc - GB00B0SWJX34

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on LSEG

1.c. Company Highlights

Expensive

Lower Yield

Higher Growth

Earnings Miss

Revenues Beats

Earnings Beats

Revenues Miss

Weak Momentum

2. LSEG Reports Strong First-Half 2025 Results

Business Segments Performance

Operating Leverage and Cash Flow

Growth Drivers and Investments

Valuation and Shareholder Returns

Outlook and Guidance

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.90%)

6. Segments

Data & Analytics (excluding Ftse Russell and Risk Intelligence)

Expected Growth: None%

Capital Markets (Including Technology Services)

Expected Growth: 6.5%

Post Trade Services

Expected Growth: 6.9%

Ftse Russell

Expected Growth: 8.0%

Risk Intelligence

Expected Growth: 7.2%

Other

Expected Growth: 6.9%

7. Detailed Products

Trading Services

Market Data

Post-Trade Services

Indices and Benchmarks

Technology and Infrastructure

Capital Markets

8. London Stock Exchange Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: London Stock Exchange Group plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

86.52$

Current Price

86.52$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA