LSEG narrows revenue forecast after 'exceptional' half for markets

Updates with analyst quote, charts

July 30 (Reuters) - London Stock Exchange Group LSEG.L narrowed its full-year revenue growth forecast to between 7.0% and 7.5% on Thursday after a spike in trading activity helped it slightly exceed market expectations for first-half sales.

The London Stock Exchange operator had previously forecast organic constant-currency growth in total income, excluding recoveries, at the upper end of a 6.5% to 7.5% range.

Analysts forecast LSEG's income excluding recoveries to grow 7.8% for the year, but to slow to 6.8% in 2027.

LSEG shares were 1.9% lower at £90.26 at 0703 GMT.

The Iran war, now into its fifth month, prompted a spike in trading activity across all major asset classes, helping LSEG's markets business, which typically benefits from such volatility.

"Our Markets businesses had an exceptional first half, achieving double-digit growth through sustained investment," said CEO David Schwimmer, adding that LSEG has "never been better positioned for future growth".

For the six months to June, total income excluding recoveries rose 8.4% versus expectations of 8.3%.

LSEG, which has faced pressure from activist investor Elliott, has also been making a public push to address concerns among some shareholders who fear AI could impact pricing and market share for its data business.

Its data and analytics business reported a 5.1% rise in organic growth in the second quarter.

"12 months on from when AI concerns first impacted LSEG shares, the continued improvement in financials should help to reassure the market that the vulnerabilities have been overblown," said RBC analyst Ben Bathurst in a note.

LSEG forecast EBITDA (earnings before interest, tax, depreciation and amortisation) margin growth of around 100 basis points, versus its previous expectation of an 80 to 100 bp rise.

It also said it planned a further £1.35 billion ($1.8 billion) share buyback, to be completed by February next year, and raised its dividend by 17%.

Reuters provides news for LSEG's news and data terminal, Workspace, and other products.

($1 = 0.7496 pounds)

(Reporting by Pushkala Aripaka in Bengaluru and Samuel Indyk in London; Editing by Mrigank Dhaniwala and Alexander Smith)

((Pushkala.A@thomsonreuters.com; X and LinkedIn: @pullthekart;))