History was made yesterday (2 January), when the FTSE 100 index reached five figures. Having been launched with a value of 1,000 on 3 January 1984, it’s taken 15,371 days to get there. But as the table below shows, the move from 9,000 to 10,000 has been the fastest ever 1,000-point increase.
| Milestone | Date achieved | Days to reach milestone |
|---|---|---|
| 1,000 | 3.1.84 | At launch |
| 2,000 | 4.3.87 | 1,156 |
| 3,000 | 11.8.93 | 2,352 |
| 4,000 | 2.10.96 | 1,148 |
| 5,000 | 6.8.97 | 308 |
| 6,000 | 23.3.98 | 229 |
| 7,000 | 20.3.15 | 6,206 |
| 8,000 | 16.2.23 | 2,890 |
| 9,000 | 15.7.25 | 880 |
| 10,000 | 2.1.26 | 202 |
The running of the index is overseen by the London Stock Exchange Group (LSE:LSEG). And with the FTSE 100 seemingly enjoying a bit of a rally at the moment, is it time to consider buying the company’s stock? Let’s take a look.
What else does it do?
The group’s about more than the London exchange. It has five business divisions with exposure to various aspects of financial markets.
- Data & Analytics – financial data and analytics
- FTSE Russell – benchmark data and indexes
- Risk Intelligence – customer and third-party risk solutions
- Capital Markets – capital raising and trading venues in multiple asset classes
- Post Trade – clearing, risk management and capital optimisation solutions
The biggest — Data & Analytics — contributed 51% towards the group’s revenue in 2024, and 37% of adjusted operating profit.
Importantly, the group has a truly global reach. Its services are used by approximately 44,000 customers in over 170 countries.
Like many technology companies, the group’s able to achieve an impressive gross profit margin. In 2024, it was 86.8%. This reflects the fact that the marginal cost of providing its services to a new customer is relatively low. It also indicates that the group’s in a position to charge a premium price for its products.
And like a number of others in the tech sector, its shares command an above-average price-to-earnings (P/E) ratio. Analysts are forecasting earnings per share of 415.8p for 2025. If correct, it implies a forward P/E ratio of 21.5. Looking ahead to 2027, the figure drops to a reasonable 17.3.
The impact of artificial intelligence
However, the group faces some challenges. As a provider of specialist services, the pool of potential new customers could be fairly limited. Also, the emergence of artificial intelligence (AI) solutions could make it easier for rivals to replicate its data services at a far lower cost.
And it remains vulnerable to a cyber attack. Indeed, in its 2024 annual report, the group warned that it “may not always be possible” to prevent such an incident.
Despite these risks, I think the group’s stock is worth considering further. Like many UK-listed companies, it’s built a worldwide presence and established an excellent reputation. Data, which has been described as the “new oil”, is big business at the moment. After all, AI models need data. And the London Stock Exchange Group has plenty of it.
Indeed, I can’t see any obvious sign that AI’s damaging its business. Of course, this might change. But the group views the technology as a means of enabling operational efficiencies and to “enhance customer propositions”. At the moment, it’s not viewed as too much of a threat.
And while I don’t believe the company’s stock is cheap, it doesn’t look to be overly expensive. On this basis, I think it’s one to consider, irrespective of how the FTSE 100 performs over the coming months and years.
