The capital markets day event from the London Stock Exchange Group PLC (LSE:LSEG) has received a fairly muted response from the City with one bank calling it a "missed opportunity."
With the new medium-term targets set out at the CMD, Jefferies said LSEG is clearly keen for the market to not obsess over specific numbers and instead focus on the general trajectory.
Organic revenue growth is targeted at mid- to high-single-digit growth and the same is true of the underlying EBITDA margin, which is expected to "increase over time”.
Overall, Jefferies felt the numbers presented look broadly consistent with where market expectations currently sit, albeit with perhaps broader and more pared-back parameters than anticipated.
But Citigroup expects the initial financial targets to be seen as a missed opportunity, with LSEG unwilling to provide quantitative figures.
“The targets may therefore be met with modest disappointment, but we have always argued that the commentary provided at the main CMD is likely to be more important, as confidence in the Data & Analytics business proposition is what will ultimately drive a re-rating,” Citi analysts continued.
The £1 billion buyback is an incremental positive, they added.
Goldman Sachs (NYSE:GS) said the new targets were characterised by accelerating growth and improving profitability over time, but dwelled on the partnership with Microsoft.
The investment bank pointed out that no “notable revenue benefits” from Microsoft have been included at this stage in consensus estimates.
It noted LSEG reported strong progress with Microsoft, including that the first applications will migrate to the cloud shortly, and reiterated guidance that product enhancements and new applications will begin to launch in the first half of 2024, with revenue impacts from 2025.