UBS maintains some misgivings about London Stock Exchange Group PLC's (LSE:LSEG) despite the capital markets and data firm's shares selling at a relative discount to US counterparts.
The main problem for the analysts at the Swiss bank is LSEG’s lack of earnings momentum, which was used to justify a 'neutral' rating.
According to UBS, LSEG's earnings per share momentum has significantly lagged behind its peers, causing the ongoing valuation discount.
Since the end of 2022, LSEG's consensus EPS for 2024/25 has been reduced by 11-12%, contrasting with the more stable or positive revisions observed with US information services names and European capital markets peers.
Despite a bullish outlook on LSEG’s long-term opportunities, UBS does not anticipate a significant acceleration in revenue or substantial upgrades to consensus EPS in the near term.
UBS analysts have a 10,000p price target on LSEG stock against a 9,406p publication price.