London Stock Exchange Group shares rose 4% to 9,114p after the financial markets infrastructure company raised its full-year guidance and announced the $3.5 billion acquisition of Octus, a fixed income and private markets data business.
Jefferies, which rates the stock a buy with a 110p target price, called the third-quarter update "plenty to like vs a low bar", saying revenues came in around 1% ahead of consensus across the group.
Subscription businesses, comprising Data & Analytics, FTSE Russell and Risk Intelligence, accelerated their combined organic growth to 6.6% in the quarter, up from 6.3% at the half-year stage, putting LSEG on track to deliver its guided full-year acceleration of around 50 basis points.
Markets came in around £20 million ahead of consensus, largely driven by better-than-expected performance in over-the-counter derivatives.
LSEG raised its full-year organic revenue growth guidance to at least 8.0%, from a range of 7.0-7.5%, which Jefferies noted was broadly in line with where consensus already sat.
The company also lifted its constant currency EBITDA margin expansion guidance to 100-120 basis points, from around 100 basis points previously, and raised equity free cash flow guidance to at least £2.8 billion from £2.7 billion.
On artificial intelligence, LSEG provided new data points on model context protocol (MCP) server adoption and customer penetration, which Jefferies said increased the company's confidence in an expected growing contribution to revenues over time.
Separately, the Octus acquisition is expected to generate revenues of more than $300 million and EBITDA of more than $120 million in 2026, implying a margin of around 40% and an acquisition multiple of roughly 28 times EBITDA.
Jefferies said the deal would accelerate LSEG's group organic subscription revenue growth to around 7% in 2027 while remaining margin neutral, with the company confirming cumulative EBITDA margin expansion of around 150 basis points over 2027-2029 is unchanged.
LSEG also confirmed capacity for a further £1.0 to £1.5 billion of share buybacks in 2027 after completing the Octus and Trumid transactions.
