Proactive Investors - Financial infrastructure provider the London Stock Exchange Group (plc) LON:LSEG) is on good footing to deliver a strong first-quarter earning print, reckon equities analysts at RBC.
Foreign exchange tailwinds combined with transactional growth in the capital markets and post-trade segments of 8% and 12% respectively “should enable the group to maintain its good recent revenue momentum”, said RBC, as will annual price increases implemented on January 1.
London Stock Exchange Group’s shares are trading at a material discount of 22.5x forward price-to-earnings compared to the data provider peer group average of 32.6x.
The majority of LSEG’s revenues come through the data and analytics channel, which includes trading and banking, enterprise and data, and investment solutions products.
Primary markets (i.e. the equities franchise) comprise just 3.3% of LSEG’s revenues, roughly the same as the forex segment.
“We continue to believe the valuation gap offers a runway for re-rating,” RBC analysts stated, giving the group a buy rating with a price target of 10,200p against a publication price of 7,958p.
First-quarter earnings are expected to be released on April 27.