The London Stock Exchange Group (LSEG) has faced a challenging year, with its share price reflecting a downturn that has disappointed many investors. After an initial surge fueled by optimism surrounding its collaboration with Microsoft, the stock is now trading 1% below its value from five years ago, a concerning statistic for long-term holders.
Despite this setback, indicators suggest that the stock is becoming increasingly attractive for potential investors. The current valuation appears more favorable than it has been in recent history, raising the question of whether the share price has ever been more appealing — an inquiry that prompts both intrigue and cautious optimism.
Key financial metrics underscore the potential upside of this investment. In the first half of 2025, the company’s adjusted EBITDA reached an impressive 49.5%, marking a 100 basis points increase. This operational leverage across its four segments—Data & Analytics, Risk Intelligence, FTSE Russell, and Markets—signals a robust high-margin profile, which is critical for commanding a premium valuation. The predictability of recurring subscription revenues further emphasizes the company’s stability in a competitive sector.
Consensus forecasts predict that adjusted earnings per share (EPS) will grow from 403p in 2025 to 496p in 2027, equating to a compound annual growth rate of roughly 10.4%. This growth is anchored in strong organic income and effective cost management, positioning LSEG favorably compared to many companies in the FTSE 100, which may not offer such compelling earnings growth or margin strength.
Additionally, LSEG exhibits strong cash generation, which supports a healthy dividend. Projections indicate a dividend of 140.8p per share for 2025, yielding around 1.6% at the current share price, with expectations for growth in subsequent years.
Currently, the stock trades on forward price-to-earnings ratios of 22 for 2025, 20 for 2026, and 18 for 2027. Although these figures may seem steep, the combination of margin strength, expected double-digit growth, and a climbing dividend justifies a closer look for discerning investors.
However, investing in LSEG is not without risks. The competitive landscape in financial data and analytics could exert downward pressure on pricing, and adoption rates for new products may fall short of expectations. Additionally, external pressures such as currency fluctuations and regulatory changes pose ongoing challenges.
Despite these risks, many analysts maintain a positive outlook on the stock. The company’s unique positioning within the FTSE 100, characterized by tech-like margins and a solid earnings forecast, makes it less cyclical than traditional sectors like banking or oil.
The collaboration with Microsoft is viewed as a potential key driver of value, and many are eager to see how this partnership evolves. With 17 analysts covering the stock, 16 have issued “Buy” ratings and only one recommends a “Hold,” suggesting confidence in LSEG’s future trajectory. The average target share price indicates a potential increase of 39% compared to its current valuation, providing further incentive for investors to consider this stock as part of their portfolio.
