London Stock Exchange Group PLC (LSE:LSEG) has plenty of valuation runway still to go according to analysts at Royal Bank of Canada (TSX:RY), who rate the exchange operator and financial data company as ‘outperform’.
Analyst Ben Bathurst described LSEG’s results and investor call as “supportive to the investment case” as it confirmed another quarter of sequential improvement.
“Income growth for the quarter beat our (and consensus) expectations whilst reassuring messaging around sustaining the elevated ASV metric also bodes well, and has further increased our confidence around FY23,” Bathurst said.
“We duly make upgrades to income estimates on a constant currency basis, but recent adverse FX moves mean our reported EPS figures fall by c.1%.
“We continue to like LSEG for the shifting narrative and valuation runway.”
The analyst added: “Whilst the shares have outperformed since FY results and placing, in our view this is no less than deserved given positive news had struggled to move the share ahead of those events.”
With a 10,200p price target RBC’s outperform rating sees some 24% upside to the current price of 8,184p.