London Stock Exchange Group PLC (LSE:LSEG) has received a share price target upgrade from the analysts at Jefferies, who can see a clear path to £115 or a near 25% rise.
Key is how successful LSEG is in accessing the expanded total addressable market (TAM) its partnership with Microsoft brings.
“We think LSEG is in the early stages of a multi-year earnings acceleration & multiple-expansion journey.
“Elongated sales cycles and customer cancellations are weighing on peers, but LSEG's messaging on subscription income trends is resolutely robust.
“The initial rollout of its MSFT-related product enhancements remains on track, supporting an anticipated top-line growth acceleration from next year.
“Taking even a modest share of the enlarged MSFT-related TAM would imply material upside.
“Meanwhile, record activity levels at TW [fixed income] and solid growth at LCH [clearing] are providing valuable ballast.”
Jefferies's target price rises to £115 from £110 with ‘buy’ still the rating.