LSEG Shares Rise After Forecast of Profitability Boost, $4 Billion Buybacks

By Najat Kantouar

London Stock Exchange Group shares rose after the company outlined plans for 3 billion pounds ($4.07 billion) of stock buybacks and forecast profitability gains in coming years, with activist investor Elliott Investment Management pushing for changes.

The financial-data provider and exchange operator has been grappling with concerns about artificial intelligence that led some investors to fear new tools could reduce demand for the company's services.

Shares in LSEG climbed 6.1% in European morning trading, making up for some of the stock's losses earlier in the year. The stock has lost more than a quarter of its value over the past year.

In taking a stake in the owner of the London Stock Exchange, Elliott wanted the company to consider increased stock buybacks and to take action to lift profit margins toward those of rivals, The Wall Street Journal reported earlier this month. LSEG competes with companies including S&P Global and Intercontinental Exchange, the owner of the New York Stock Exchange.

LSEG said Thursday that it planned buybacks valued at 3 billion pounds by February 2027. This compares with the 2.1 billion pounds it returned through stock repurchases last year. It also lifted its final dividend by 16% to 103 pence a share.

The company forecast an increase in its adjusted earnings before interest, taxes, depreciation and amortization margin at constant currency of between 0.8 and 1 percentage points in 2026. For last year, it reported an adjusted Ebitda margin of 50.3%, up 2.1 percentage points when excluding currency movements.

LSEG said continued revenue growth and efficiencies would help it improve profitability beyond this year, targeting an increase of around 1.5 percentage points in its underlying Ebitda margin between 2027 and 2029.

The company's new midterm targets, a meaningful buyback and its comments around business momentum should help improve sentiment and clear some of the AI fears that have hurt the stock in recent months, analysts at J.P. Morgan Cazenove wrote in a note to clients.

David Schwimmer, chief executive of LSEG, said the transformation of the group's systems and the use of AI and other technologies helped it deliver earnings growth that significantly outpaced revenue.

The company said full-year adjusted Ebitda amounted to 4.52 billion pounds, a rise of 12% when excluding currency movements.

Total income excluding recoveries rose 7.6% at constant currency to 8.99 billion pounds, driven by growth across all its key segments. Recoveries mainly relate to fees for third-party content, such as exchange data, that is distributed directly to customers.

Analysts had forecast total income excluding recoveries of 8.98 billion pounds and adjusted Ebitda at 4.52 billion pounds, according to a company-compiled consensus.

For the year ahead, LSEG said it expects organic constant currency growth in total income excluding recoveries of 6.5% and 7.5%, along with an equity free cash flow of at least 2.7 billion pounds for 2026.

Write to Najat Kantouar at najat.kantouar@wsj.com

(END) Dow Jones Newswires

February 26, 2026 05:58 ET (10:58 GMT)