London Stock Exchange Group PLC (LSE:LSEG) pushed higher as analysts at UBS took a brighter view of company's Trading & Banking division.
The Swiss bank upgraded the stock to’buy’ from ‘hold’ and raised its price target 2% to £87.
The broker has taken a bullish view on revenue growth estimates predicting compound annual growth rates between 2022-25 of 8%, above the market consensus of 7.2%, largely driven by an upgrade to the outlook for the company’s Trading & Banking division.
“We argue LSEG shares are cheap at current levels, trading at the lower end of its 24-month trading range of £70-85.” The broker noted the forward P/E multiple (using consensus estimates) of 20x is near a 5-year low and given the improved messaging from the company following its full-year 2022 results, views the risk-reward profile to be very favourable at current valuations.
“We think LSEG can comfortably increase its revenue growth outlook to 6-8%, putting it inline with the targeted revenue growth rates of several of US Info Services companies which we think will drive multiple expansion,” analysts at UBS wrote.
Shares in London Stock Exchange rose 1.6% to 7,400p mid-morning on Friday.