BofA: LSEG Shares Still 'Highly Attractive' Post-H1 Results; Buy Rating Kept

01:20 AM EDT, 08/07/2026 (MT Newswires) -- BofA Global Research said London Stock Exchange Group (LSEG.L) shares "remain highly attractive," noting its valuation is "disconnected" from its growth potential following the bourse operator's first-half report. "We think the market undervalues LSEG's rising growth, as it upgraded revenue guidance to the top end of its 6.5-7.5% range to 7.0-7.5% (BofA 7.5%), supported by diversification in Markets and accelerating subscription growth. Combined with increasing operating leverage (EBITDA margin rises +100 [basis points] in 2026-28) and GBP3bn of share buybacks this year, we forecast 11% EPS [compound annual growth rate] in 2026-28. Strong [free cash flow] generation also implies an [above-average] ~7% yield. LSEG is in our Europe 1 list of best ideas," according to a Thursday note. "Shares undervalue LSEG's diversified business and strength in [data and analytics] where client usage continues to increase, including from AI. Although the company did not provide explicit guidance on revenues coming from new AI-driven channels like [Model Context Protocol], we believe it would start to contribute to LSEG's subscription revenues in 2027 and be incorporated in future guidance," analysts added. After the interim results, the research firm said its EPS forecasts for the company were "relatively unchanged," with a minor lift to the full-year 2026 estimate and cuts to the 2027 and 2028 projections, as marginally lower revenues and foreign-exchange drag were offset by favorable non-controlling interests and share count. BofA reiterated its buy rating and price objective of 115 pounds sterling on the London stock. Meanwhile, the price objective on the American depositary receipt was raised to $38.63 from $37.95 due to currency movements.