It was a strong showing from the London Stock Exchange Group PLC (LSE:LSEG) this week.
Third-quarter results soothed investor nerves about artificial intelligence and competition, while reminding the market that few companies mint cash quite like LSEG.
JP Morgan has lifted its earnings forecasts by 5% for 2025 and 7% for 2026, keeping its 'overweight' rating and a 13,300p target price, about 40% above the current level.
The US bank's upgrades reflect three key positives: the group’s deal to take a bigger share of revenue from SwapClear, worth a 2–3% boost to adjusted earnings per share; a new £1bn share buyback; and stronger profitability guidance.
Management’s presentation appears to have calmed the market after a wobble earlier in the year when investors fretted that AI might erode the data business.
JP Morgan says those fears were “successfully addressed,” with LSEG showing how machine learning can complement its information platforms rather than threaten them.
There was more reassurance in the numbers. Margins are heading higher again, organic growth remains solid, and the balance sheet easily supports further acquisitions.
The sale of a 20% stake in Post Trade Solutions at a punchy 53 times earnings suggests strong demand for LSEG’s clearing and risk management assets... and validates its push into post-trade technology through earlier deals such as Acadia and Quantile.
After a year of underperformance driven largely by de-rating rather than earnings weakness, JP Morgan thinks the shares are now due a gradual rerating.
With robust cash flow, rising returns to shareholders and a credible AI strategy, the exchange looks to have regained its footing.