RBC has reaffirmed its ‘outperform’ rating on London Stock Exchange Group PLC (LSE:LSEG), sticking with a price target of 13,200p after updating its forecasts on the back of half-year results.
RBC describes the operational momentum at LSEG as “impressive”, noting that organic growth continues to run ahead of targets, with first-half group income up 7.8%, putting it on track for another year of robust revenue growth.
The note highlights that there is “plenty to like” in the latest figures, including a step-up in capital returns following the announcement of a £1bn buyback.
While RBC does acknowledge that growth in Data & Analytics is now “on watch” after a softer quarter, it sees the recent share price weakness as creating a more compelling value opportunity.
This is especially given LSEG trades at a significant discount to international data provider peers on a 2026 price/earnings multiple of 22 times, compared with the sector’s 31 times.
Looking ahead, RBC expects the group’s diversified business model - across data, analytics, capital markets and post-trade services - to drive further growth, supported by long-term structural tailwinds and ongoing benefits from the Microsoft partnership.
Underlying margins are set to improve as investment slows, and strong free cash flow should underpin future buybacks and dividends.
“We see the argument for a discount as further weakened,” the analysts write, suggesting that LSEG remains well placed for a re-rating as confidence in the outlook continues to build.
In afternoon trading on Wednesday, the shares were up 1.8% at 9,984p.