UBS upgrades LSEG to ‘buy’ from ‘neutral’

UBS upgraded its stance on LSEG on Tuesday to ‘buy’ from ‘neutral’ and lifted the price target 17% to 13,500p.

“Over the next three years, we expect LSEG to accelerate revenue growth, generate circa 100 basis points of annual EBITDA margin expansion and grow EPS by 15% per annum (consensus expects similar)," UBS said.

"Despite this, LSEG continues to be valued like an exchange, trading at a significant discount to the US and EU Info Services names, despite stronger revenue and EBITDA outlook."

UBS said that if LSEG can achieve these expectations, there is a high probability it re-rates higher, which would offer 20-25% incremental upside to the bank’s price target.

"We conservatively forecast LSEG's forward price-to-earnings multiple to remain in the 28-29x range," it added.