The LSEG share price has crashed this year, and a recent death cross point to more downside. London Stock Exchange stock fell to a low of 9,338p on Wednesday, down by over 22% from its highest point this year, and is hovering near its lowest point since August 2024.
Why the LSEG share price has crashed
The London Stock Exchange stock price has dropped in the past few months as the industry faces headwinds. For example, FactSet Research Systems (FDS), which offers some similar services, has plunged to $370, down by over 25% from the highest point this year and is trading at its lowest point in years.
The LSEG share price crash accelerated after it published the last financial results. These numbers showed that its half-year revenue was £4.49 billion, a 7% increase from the same period last year. Its organic growth was 7.8% in this period.
While LSEG is known for its exchange business, its main engine is the data and analytics division, which it boosted with the Reuters buyout. The data and analytics revenue rose to nearly £2 billion, while markets made £1.7 billion. Its FTSE Russel division made £472 million, while the risk intelligence brought in £287 million.
LSEG also continued its profitability growth in the first half of the tear. Its adjusted EPS jumped to 208.9p from 174p in the same period last year.
Most importantly, the company continued returning capital to its shareholders. It made £935 million in free cash flow, paid a dividend of £471 million and repurchased shares worth £500 million. The management guided towards £1 billion buyback in the second half.
Therefore, the LSEG stock is falling despite the strong results because investors are concerned about its future growth. Still, these fears seem overblown as the company left its organic growth forecast intact and boosted its EBITDA margin to between 75 and 100 basis points.
The company is also innovating to gain an edge and boost its growth. It is working on an asset tokenization strategy and has a plan to introduce 24-hour trading.
Most importantly, it has transitioned its business into a subscription business. Over 73% of its business is based on subscriptions, which has a low churn.
The stock has also plunged as the IPO calendar in the UK dries and more companies plan on moving their listings abroad. A good example of this is Wise, which is moving its primary listing to the United States.
LSEG stock price technical analysis
LSEG stock chart | Source: TradingView
The three-day chart shows that the London Stock Exchange share price peaked at 12,080p in February and then embarked on a strong bearish trend.
LSEG stock has moved below the key support at 10,125p, its lowest point on April 4. It has also moved below the 50-day and 100-day moving averages and the crucial support at 9,448p, its highest point in 2020.
The most likely outlook is where the stock continues falling as sellers target the key support at 8,000p and then resume the uptrend. A move above the resistance level at 10,125p will invalidate the bearish view.
The post LSEG share price crashes despite strong fundamentals: is it a buy? appeared first on Invezz
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