The London Stock Exchange (GB:LSEG) released its interim results for 2022, which were slightly ahead of expectations, driven by strong income growth across segments and better cost management.
The LSE’s stock has performed well and has beaten overall market returns this year. The company’s shares have gained 20% YTD and 5.5% in the last year.
Shares reacted positively to the results, including a dividend hike and a new share buyback for £750 million. Its interim dividend was increased by 27% to 31.7p per share.
Is London Stock Exchange profitable?
LSE is a profitable company: adjusted profit for the first half of 2022 increased by 21.9% to £1.06 billion.
The total income for the period grew by 6.2% to £3.5 billion, pushed up by the data and analytics segment, which contributed more than 65% of total income.
The data segment posted an income of £2.3 billion, up by 4% from last year. The LSE’s capital market segment posted the highest jump in its income by 13%, to £720 million.
Looking ahead, the company expects that it will achieve cost synergies worth £100 million in 2022, which makes up 60% of its overall target of £400 million by 2025.
The company’s profitability was also supported by the savings target from its acquisition of Refinitiv in 2021. Refinitiv is a data and infrastructure provider in the global financial markets. With this acquisition, LSE is better placed in financial data and information services, its biggest segment by revenue.
How many stocks are on the London Stock Exchange?
The LSE is among the oldest stock exchanges in the world, with a history going way back 300 years old.
As of last month, the LSE had 1,900 companies’ stocks trading on its platform, which decreased slightly from the previous month. These companies have a total market capitalization of £3.9 trillion.
Is LSEG a good investment?
According to TipRanks’ analyst rating consensus, LSE stock is a Strong Buy. The company has a total of eight ratings, including seven Buy and one Hold recommendations.
The LSE stock forecast is 9,312.6p, with a high and a low forecast of 10,501p and 8,000p, respectively. The price forecast is around 10.3% higher than the current price level.
After the results were released, many analysts reiterated their buy ratings. Among them, Morgan Stanley’s Bruce Hamilton increased his target price from 10,115p to 10,501p while maintaining a buy rating. The target price has the highest upside potential of 22.73%.
Conclusion
LSE is a stable company with a lot of recurring revenue-generating businesses. With its data and analytics generating stable income, the company is well positioned. The overall prospects for the stock are bullish.
