Shares in London Stock Exchange Group PLC (LSE:LSEG) have fallen sharply since the start of July, with investors left questioning whether the sell-off marks a buying opportunity or signals deeper trouble ahead.
The company’s stock has dropped 16% over two weeks, making it the worst performer among major European diversified financials in the period.
The slump followed half-year results that brokers Citi and UBS described as solid, featuring upgrades to full-year 2025 guidance and larger share buybacks.
Citi noted: “LSEG shares are down 16% in two weeks, despite solid interim results… The investment thesis is not broken.”
UBS echoed that sentiment, stating: “The results themselves weren't bad. Revenues and costs largely were in line and the company announced a £1 billion share buyback for the second half of 2025.”
Despite this, the market focused on signs of slower revenue growth and heightened competition, particularly concerns around advances in artificial intelligence.
A key source of concern was a fall in LSEG’s annual subscription value, a measure of recurring revenue growth, which declined from 6.4% to 5.8% over the quarter.
Management guided for a further 30 to 40 basis point fall in the third quarter, attributing this to consolidation among banking clients.
UBS said: “A 60 basis point decline to the ASV… combined with recent news reports on competitive AI threats, has amplified investor concerns about LSEG’s revenue growth model going forward.”
Both Citi and UBS, however, maintain positive ratings on the shares. Citi reiterated its “buy” recommendation and increased its price target to £132, arguing the current valuation of around 20 times expected 2026 earnings per share is near ten-year lows and well below that of United States peers.
Citi wrote: “We still see increasing demand for financial data and artificial intelligence will only boost this trend.”
UBS also retained its “buy”, though it trimmed its price target to £124 from £131, representing more than 30% potential upside from current levels.
UBS has made small upward adjustments to earnings forecasts for 2025 to 2027, mainly reflecting stronger share buybacks, but reduced its revenue growth estimate by about 0.5 percentage points a year due to weaker price increases.
UBS highlighted that the market now values LSEG’s data and analytics division at just eight times expected 2026 earnings, calling this a significant discount to peers.
Both banks addressed investor fears about disruption from artificial intelligence, particularly in LSEG’s desktop business.
UBS said: “We don’t view the risk as significant given the quantity and quality of data offered by LSEG,” and argued that the share price already reflects much of the perceived downside risk.
Attention now shifts to whether LSEG can deliver on management’s promise of faster revenue growth, especially through its partnership with Microsoft.
UBS noted: “Nobody can fault management’s vision and optimism. But two and a half years after the Microsoft partnership formed, investors are still waiting for LSEG to monetise on the partnership.”
Management continues to guide for accelerating revenue in data and analytics in 2026, which both brokers say will likely depend on achieving higher pricing.
Both Citi and UBS argue that the recent sell-off may present an attractive opportunity for investors prepared to ride out short-term volatility.
The shares rose 1% to £94.10.