The London Stock Exchange Group (LSEG) share price just hit a 52-week high. I’m backing it to climb even higher

The London Stock Exchange Group share price is on fire right now. Here, Edward Sheldon looks at what’s going on and explains why he expects further gains.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Bus waiting in front of the London Stock Exchange on a sunny day.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The London Stock Exchange Group (LSE:LSEG) share price is on the rise at the moment. Earlier today (1 August) it hit a new 52-week high.

As an investor in the financial markets infrastructure and data business (it’s a top-10 holding for me), I’m happy with this rise. However, looking at what’s going on at this company, I think its share price can climb higher.

Created with Highcharts 11.4.3London Stock Exchange Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Nice H1 results

London Stock Exchange Group, or LSEG for short, posted its results for the first half of 2024 this morning, and the market was impressed with the numbers and guidance.

Should you invest £1,000 in Lloyds Banking Group right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group made the list?

See the 6 stocks

For the period, total income excluding recoveries was up 5.4% year on year to £4.2bn (above estimates) while operating profit rose 9% to £812m. Adjusted earnings per share came in at 174p, up 8.1% on the same period last year, while the dividend was hiked 14.8% to 41p per share.

We have finished the first half strongly, maintaining our momentum in Q2 with every business line contributing to revenue growth.

LSEG CEO David Schwimmer

Looking ahead, the company said it was expecting profit margins to continue improving. It also reiterated its medium-term guidance of mid-to-high single-digit organic revenue growth annually, accelerating after 2024.

Overall, it was a nice set of results from the FTSE 100 company.

Share price potential

As for why I expect the share price to continue climbing, there are a few reasons. One is that the company – which is leading player in the financial data space now – is really innovating at the moment.

The company said today it’s made “significant enhancements” to its Workspace data platform, leading to several competitor displacements. So it looks like LSEG could be set to capture market share from other players such as Bloomberg and FactSet. This could lead to a higher level of growth.

Another is that in recent years, the share price has been held back by selling activity from the Blackstone consortium, who received a lot of stock when LSEG purchased Refinitiv. LSEG told us today however, that the share overhang from this consortium is now under 2%.

Finally, there’s the valuation. LSEG shares are expensive by UK standards. Currently, the P/E ratio here is about 27 (falling to 24 using next year’s earnings forecast). But looking at the valuations of other similar companies including S&P Global (33) and MSCI (37), the stock’s actually pretty cheap on a relative basis.

I’m staying invested

Of course, there are no guarantees the share price will keep rising from here. If we were to see a major slump in tech shares, this stock could underperform, because it’s very much a technology company today.

Another risk is a downturn in the financial markets. This could lead to lower revenues and earnings and share price volatility.

All things considered however, I think this stock has bags of potential. I plan to stay invested in it for the long term.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon has positions in London Stock Exchange Group Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Like buying £1 for 51p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

More on Market Movers

Investing Articles

Down 11% today, is this FTSE 250 share NOW a top dip buy?

This FTSE 250 share has lost around a fifth of its value during the last 12 months. Is it now…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

What’s happening to the Lloyds share price?

The Lloyds Bank share price has gained 31% in the past 12 months, but it could be facing its sternest…

Read more »

Frustrated young white male looking disconsolate while sat on his sofa holding a beer
Investing Articles

Down 13% in the FTSE 250! Why did Pets at Home stock sell off today?

Our writer looks at the worst-performing stock in the FTSE 250 today to see what has gone wrong and whether…

Read more »

Investing Articles

Up 46% in a fortnight! Is this soaring ex-penny stock still a FTSE gem at 59p?

SRT Marine Systems (LON:SRT) has been one of the very best FTSE small-cap stocks to own after surging 132% in…

Read more »

Investing Articles

This FTSE 100 fashion icon just broke the £1bn profit ceiling! What’s next?

FTSE 100 fashion retailer Next posted £1bn annual profit in this morning's results. In light of recent trade tariffs, is…

Read more »

Investing Articles

Record £1bn profit gives the Next share price a boost. Is it still cheap?

The Next share price has been soaring ahead of sector rivals, and the latest full-year results might just give us…

Read more »

Investing Articles

An activist thinks the Smiths Group share price is too low. These first-half results might show why

The Smiths Group share price has had a solid five years, and City analysts are predicting yet more years of…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

As the Kingfisher share price falls 12% on FY results, is it too cheap to ignore?

The economic pinch is pressuring big-ticket DIY sales, but the Kingfisher share price might just have fallen too far on…

Read more »