Citi has reiterated its ‘buy’ rating on London Stock Exchange Group PLC (LSE:LSEG), with a £120 price target, after updating forecasts following its third-quarter results.
The broker has introduced 2029 estimates and incorporated pro-forma financials for the planned acquisitions of Octus and Trumid, which are expected to complete in the first half of 2027.
Citi estimates the two acquisitions will increase earnings per share (EPS) by 1.5% in 2029, after accounting for financing costs.
Octus is also expected to support subscription growth, adding 30 basis points to the bank’s 7.0% forecast for 2027.
This would take the forecast growth rate to approximately 7.3%, assuming the acquisition completes as expected.
However, the broker’s revised forecasts for LSEG’s standalone business indicate a slight deterioration in underlying earnings expectations.
Citi has increased its constant-currency EPS estimates for the existing business by between 0% and 1%, but foreign exchange headwinds offset those improvements.
The resulting impact is a net reduction of approximately 1% in the bank’s underlying EPS forecasts.
Citi has also extended its modelling horizon to include 2029, providing a longer-term assessment of the group’s earnings potential following the acquisitions.
LSEG currently trades on 15 times Citi’s forecast 2028 EPS, with the broker maintaining its positive stance despite the currency-related earnings pressure.
The bank’s £120 target price and Buy recommendation remain unchanged.