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London Stock Exchange Group PLC LSEG

Rating as of

Morningstar’s Analysis

Valuation
Currency in GBX
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

LSEG Hosts Investor Day; Update On Investment Spending Postponed but We Find Positive Indications

Niklas Kammer, CFA Equity Analyst

Analyst Note

| Niklas Kammer, CFA |

During its first of two investor days this year, London Stock Exchange Group, or LSEG, dived into its newly assembled data and analytics business. In focus were LSEG’s trading and banking, enterprise data solutions, and customer and third-party risk solutions segments. In October another investor day will cover investment solutions, wealth solutions, and its foreign-exchange trading venues. We had marked this event as a possible opportunity for management to shed light on its operating and capital expenditure outlook as well as potential synergy updates, which we believe are at the center of investors’ concerns. In this respect, our expectations fell flat as management promised to give a full update on these topics at the second-quarter results on Aug. 6. However, commentary by management during the call gives us confidence that risks to our fair value estimate sit on the upside. For now, we maintain our GBX 9,100 per-share fair value estimate and wide moat rating. Shares look undervalued.

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Company Profile

Business Description

London Stock Exchange Group is a fully integrated financial exchange company covering the financial market value chain from primary and secondary markets across multiple asset classes over data, index and analytics down to clearing and post-trading reporting. With the acquisition of Refinitiv, LSEG generates about two thirds of its revenue from data and analytics including its FTSE Russell and WM/Refinitiv benchmarks as well as data feeds and terminals. The group is also a majority shareholder in Tradeweb, one of the dominant global fixed income trading venues, as well as LCH, the largest clearing house for over-the-counter swaps globally.

Contact
10 Paternoster Square
London, EC4M 7LS, United Kingdom
T +44 2077971000
Sector Financial Services
Industry Financial Data & Stock Exchanges
Most Recent Earnings Sep 30, 2014
Fiscal Year End Dec 31, 2021
Stock Type
Employees 1,907

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