Lseg's Elliott: lite playbook may just be enough

London Stock Exchange

26/02/2026 13:20

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Neil Unmack

LONDON, Feb 26 (Reuters Breakingviews) - London Stock Exchange Group LSEG.L is borrowing from the activist investor playbook, but only to a limited extent. The $57 billion data-to-exchange group on Thursday announced a share buyback alongside new revenue growth and EBITDA margin targets. The moves reinforce the case that artificial intelligence won’t kill the group, and should also go some way to pleasing pushy investor Elliott Management. But LSEG boss David Schwimmer will need to show he can keep reviving the depressed stock.

Schwimmer is doubly under pressure. Before Thursday, LSEG's shares had fallen nearly 30% in a year, amid fears that AI groups like Anthropic could replace or undercut financial data companies. And Elliott, known for sometimes hostile activist campaigns, popped up with a shareholding, raising expectations of a large share buyback, cost cuts and asset sales. LSEG is the largest customer of Breakingviews' owner Reuters, which provides news for the Workspace terminal and other products.

While Elliott has not publicly articulated its demands, Schwimmer’s moves only go some way to meeting those that have been reported. LSEG's new 3-billion-pound share buyback is twice analysts' expectations, but trails the 5 billion pounds possible target that Elliott might have wanted, as suggested by a Reuters report. And Schwimmer seems opposed to radically changing the LSEG structure, which includes business from clearing, indexes, post-trade services as well as bourses.

The case for such radical change, so far, is unclear. Selling down stable and richly valued assets like Tradeweb Markets TW.O, or taking on more debt to turbocharge buybacks, would leave LSEG with less flexibility. Shareholders may also end up more exposed to the businesses that may be vulnerable to AI disruption.

Schwimmer’s best defence, both to market panic and Elliott, is to show that his plan is working. Hence Thursday’s stated ambition to grow revenue at a "mid to high single digit" rate between 2027 and 2029, and to boost the EBITDA margin by 1.5 percentage points. While those targets are broadly consistent with analysts’ expectations, per Visible Alpha data, they should reassure that AI destruction is not on the horizon. LSEG is also providing more data on how AI is boosting its business. That includes giving the number of new customers plugging its data into AI models, or the fact that LSEG has achieved a 51% reduction in data quality issues over four years. Additional disclosure on customer retention rates and new product use may also help.

A 6% share price bump on Thursday should buy Schwimmer time from Elliott and other shareholders. LSEG is now worth around 18 times forward earnings, in line with typically more lowly-rated European exchanges Euronext ENX.PA and Deutsche Boerse DB1Gn.DE. Yet it's still at a 28% valuation discount to U.S. peers MSCI MSCI.N, S&P Global SPGI.N and CME CME.O, which on average trade at 25 times forward earnings. The case for sticking with Schwimmer's activist-lite plan rests on closing that gap.

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CONTEXT NEWS

London Stock Exchange Group on February 26 announced a 3-billion-pound share buyback, while reporting revenue growth of 5.8% to 9 billion pounds in 2025.

LSEG said it now expects revenue to rise by 6.5% to 7.5% in 2026, on an organic basis, and the EBITDA margin to improve by up to 1 percentage point. The EBITDA margin was 50.3% in 2025.

The group also committed to deliver a further 1.5 percentage point improvement in the EBITDA margin between 2027 and 2029, and to continue to grow revenue in the range of 5% to 9% per year.

LSEG shares rose by 5.9% as of 0958 GMT on February 26 to 8,252 pence per share.

LSEG's price-earnings multiple has taken an AI beating https://www.reuters.com/graphics/BRV-BRV/byvrnjonove/chart.png

(Editing by Liam Proud; Production by Streisand Neto)

((For previous columns by the author, Reuters customers can click on UNMACK/neil.unmack@thomsonreuters.com))