LSEG Earnings: Buyback and Medium-Term Guidance Display Confidence

Key Morningstar Metrics for London Stock Exchange Group

What We Thought of London Stock Exchange Group’s Earnings

Along with good 2025 results, London Stock Exchange Group LSEG announced a £3 billion share-buyback program and medium-term guidance relying on growth in its data and analytics business. The shares have recovered from their Claude plug-in-related selloff in early February, but upside remains.

Why it matters: LSEG’s stock has been under pressure on fears that large language models could replicate its data sets and that a shift of seat-based pricing to API feed-based data consumption by machines could weaken margins.

• Active investor Elliott Management is reported to have built a stake in LSEG, looking to extract value from its investment through larger share buybacks and improved messaging around the defensibility of LSEG’s datasets.
• Midterm guidance of mid- to high-single-digit organic total income growth until 2029, specifically relying on accelerating subscription growth, directly goes against the artificial intelligence disintermediation narrative that the market is currently discounting into LSEG’s share price.

The bottom line: We raise our fair value estimate to GBX 11,900 per share from GBX 11,200 after updating our model with 2025 results. Our Wide Morningstar Economic Moat rating is unchanged, and we continue to see material upside in the shares.

• Our view that LSEG is an infrastructure player that generates and controls a large portion of its datasets is unchanged. We anticipate LSEG to become a core enabler of new AI-based financial analysis tools, rather than falling victim to a new form of financial data consumption.

Between the lines: LSEG has signed long-term contracts worth £1.9 billion with financial institutions to access their data and workflow products, highlighting that customers are not taking a wait-and-see approach despite AI disruption concerns.