JPMorgan puts LSEG on 'positive catalyst watch' ahead of CMD

The bank said it was reiterating its conviction on the back of three considerations. Firstly, it expects a material upgrade to revenue growth targets as part of the new strategic plan, thanks to the growing momentum in Data & Analytics.

"Whilst our estimates are only modestly above consensus, we see upside risk if the Group quantifies the revenue contribution from the Microsoft partnership, which we think is not fully reflected in estimates yet," JPM said.

Secondly, it said the valuation gap should narrow if growth accelerates.

"LSEG still trades at a 24% discount to data companies, despite offering similar earnings per share growth profile (on JPMe and Bloomberg consensus). The overhang risk, which might have previously capped its valuation, has also considerably reduced."

Thirdly, the bank pointed to upside risk from capital generation and said bolt-on deals could continue to add inorganic revenue growth, with capacity for larger deals. "The company could otherwise continue with buy-backs," it added.

JPM rates the stock at ‘overweight’.