Redburn maintains buy on LSEG stock, sees 30% upside potential via Investing.com
On Wednesday, Redburn-Atlantic maintained its buy rating at open London Stock Exchange Group Plc. (LON::LN) (OTC: LNSTY) stock, with a target price of GBP135.00.
The company expects significant returns for LSEG shareholders as the company begins to see a return on its investment following the Refinitiv acquisition. Focusing on corporate sales and new product launches is expected to improve productivity.
The financial institution’s Chief Financial Officer, Proch, is noted for emphasizing cost efficiency, especially during customer service activities. This approach is expected to contribute to lower costs per transaction as LSEG scales its business. According to Redburn-Atlantic, these strategies are set to support the stock’s position as a top pick within its portfolio.
The company’s analysis suggests a 30% potential upside for the stock, based on a 12-month flat price of GBP135.00. The expected revision is due to a large forecast increase in free cash flow to equity and earnings growth throughout the 2023-27e period.
A Redburn-Atlantic analyst expressed confidence in the company’s trajectory, saying, “We believe that LSEG shareholders are close to reaping the benefits of a period of capital investment following the acquisition of Refinitiv, following a restructuring of the go-to-market strategy regarding the sale of the business.”
The London Stock Exchange Group’s stock forecast is positive, and Redburn-Atlantic expects the company’s new products to lead to a profit. In addition, the company predicts a near-doubling of free cash flow on equity and earnings growth over the next few years, maintaining its positive outlook for the stock’s future performance.
In other recent news, London Stock Exchange Group’s first-half financial results were reported to be strong by RBC Capital Markets, which revised its outlook on the company’s shares, raising its target price to £110.00 from £107.00.
The firm reaffirmed its Outperform rating on the stock, citing the success of Workspace, a creative platform provided by the London Stock Exchange Group, as a key driver of the company’s medium-term investment case.
RBC Capital Markets noted that the company’s shares do not fully account for the reduced risk associated with the recent successful placement of shares, which reduced the risk of suspension.
In addition to RBC’s positive assessment, Jefferies, the global investment banking firm, raised its price target on London Stock Exchange Group from £110.00 to £115.00, maintaining its buy rating on the stock. This adjustment reflects Jefferies’ optimism about the company’s growth potential, particularly in subscription revenue, which is expected to accelerate from 2025 onwards. The main driver of this growth is identified as the data and analytics category.
In addition, Jefferies suggests that the London Stock Exchange Group may be at greater risk of forecasting consensus from 2026 if it benefits from an expanded Total Addressable Market through its partnership with Microsoft (NASDAQ:). These recent developments continue to position the London Stock Exchange Group as a focus for investors.
InvestingPro Insights
The latest data from InvestingPro adds depth to Redburn-Atlantic’s positive outlook on the London Stock Exchange Group (OTC: LNSTY ). The company’s market capitalization reaches $70.59 billion, indicating its significant presence in the financial markets sector.
InvestingPro Tips highlights LNSTY’s strong dividend history, which has maintained dividend payments for 24 consecutive years and increased them for 9 consecutive years. This consistent dividend policy is consistent with the firm’s expected increase in free cash flow, which may benefit shareholders in the long run.
The company’s P/E ratio of 80.75 indicates a high earnings multiple, which can be justified by the expected growth and productivity gains mentioned in the Redburn-Atlantic analysis. Additionally, LNSTY’s revenue growth of 4.91% over the past twelve months and a strong net income margin of 86.51% suggest a solid financial foundation for the company’s expansion plans.
These details are consistent with the article’s focus on LSEG strategic investments and cost savings estimates. For investors looking for a comprehensive analysis, InvestingPro offers 8 more tips on LNSTY, which provide a deeper understanding of the company’s financial health and market conditions.
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