London Stock Exchange share price history: on course to new heights before the coronavirus sell-off
09:24, 6 April 2020
The London Stock Exchange share price history shows that the company was having a remarkable 2020 after its stocks reached their highest price in five years, peaking at £8,542 per share on February 19, before the coronavirus sell-off went down and its shares ended up losing nearly 27 per cent of their value.
The company’s 2019 annual report, presented at the end of February 2020, shows decent results as the company’s revenues grew by 8 per cent and its adjusted earnings per share (EPS) also experienced a 15 per cent increase YoY.
Most of this growth has been fuelled by the group’s three largest business segments, which generate more than 90 per cent of its revenues. These are Information Services, Post-Trade Services and LSE Capital Markets Division, all of which experienced positive single-digit growth by the end of 2019.
London Stock Exchange share price history (LSE) (YTD)
London Stock Exchange historical data shows that the company’s shares took a heavy hit after the coronavirus sell-off started on February 20, and so far the stock has lost nearly 27.5 per cent of its value since then. Nevertheless, these losses are smaller compared to the 33 per cent loss recorded by the FTSE 100 index during the same period.
Additionally, LSE share price history shows that the stock is currently trading at a level that’s 37.9 per cent higher than its 52-week low and 27.5 per cent lower than its 52-week high, while its current price is also 43.3 per cent higher than the stock’s 50-day Simple Moving Average (SMA).
Year-to-date, The London Stock Exchange performance has been negative, accumulating a -19.33 per cent loss since January 1. Nonetheless, the stock has generated gains during the past 12-month period, returning 37.77 per cent to investors over that period but, more importantly, an 88.2 per cent return pre-coronavirus that probably had investors cheering before the outbreak took a large cut of those gains.
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London Stock Exchange (LSE) stock outlook
LSE (London Stock Exchange) shares are traded on the company’s own exchange (the LSE) and the group is currently valued at nearly £22bn.
Additionally, these are some of the most important stock market metrics for the London Stock Exchange Group (LSE):
- 1-Year Return: -37.77 per cent
- P/E Ratio: 52.92
- Price-to-Book: 6.33
- Price-to-Sales: 9.42
- Dividend: 1.12 percent
LSE Key Milestones (five-year)
London Stock Exchange share price history shows how the stock has evolved positively during the past five years, generating a 27.66 per cent pre-coronavirus CAGR and a 20.27 per cent CAGR based on today’s price.
The stock reached a five-year high on February 19, reaching a price of £8,542 per share, probably as a result of the company’s latest positive financial performance. Additionally, the company has been increasing its dividends per share significantly, nearly doubling the amount paid per share by the end of 2019 compared to the amount paid back in 2015.
Furthermore, the company’s financials remain strong, as LSE currently operates with a Net-debt to Adjusted EBITDA ratio of 1.4x while it also has £256m in debt commitments due in 2020 and nearly £1.4bn in cash.
This situation puts the company in an advantageous position to withstand any financial blow that may come from reduced revenues that may result from the coronavirus global crisis.
LSE most recent stock news
LSE’s capital market operations have been under pressure lately as contingency plans have to be drafted to make sure the exchange systems remain operational regardless of potential stricter quarantine measures issued by the government.
Additionally, the company is also worried about delivering some of its services including hosting corporate events, which is now impossible due to social distancing measures.
As a result, LSE has been reaching out to the government to prompt them to provide the legal framework to hold these events virtually, even though this would be quite an uncomfortable change, especially for UK companies which are used to present their results and hold their meetings in person.
These gatherings are particularly important considering the global turmoil that the coronavirus has caused, which may lead shareholders to prompt management teams to provide answers and disclose strategies that are crucial to the continuance of their businesses.
Furthermore, it is hard to say how LSE’s operations will be impacted by the coronavirus outbreak, but it is safe to say that IPO activities will be paused until the markets are less volatile.
On a positive note, the significant volume of market activity these days should generate a windfall of revenues for the company’s Information Services and Post-Trade Services segments.
LSE Stock: buy or sell?
Out of 13 analysts surveyed by the London Stock Exchange group on March 20, 2020, eight rated the stock as outperforming, four suggested investors to hold, and only one considered the stock as underperforming.
The main elements driving this perception are probably the recently declined proposal from the Hong Kong Stock Exchange (HKSE) to merge both companies, along with the company’s latest positive financial performance.
On the other hand, it is important to note that LSE’s dividend is quite low, even after considering the most recent price drop. This puts more pressure on the stock as most of the returns have to be generated by capital gains, while it also discards it as a fixed-income alternative.
Moreover, the company’s price-to-earnings ratio seems to be quite high, even after the sell-off. A 52 P/E ratio is definitely on the high end of valuations, especially right now, and investors should take this into account before following analyst’s recommendations.
Bottom line
London Stock Exchange historical prices show a positive evolution of the stock before the coronavirus sell-off. The latest upward trend led the stock to a five-year high back in February, even though its valuation metrics seem to indicate that stock may be overvalued.
Further research on the fundamentals behind this valuation is advised, especially after considering LSE’s low dividend yield.
Additionally, the performance of the capital market’s business unit, which generates a significant portion of its revenues, is subject to LSE’s ability to continue operating even during the most demanding market conditions and the reliability of its technological platforms are crucial in this regard.
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Read more: London Stock Exchange: from coffee house to cyber market
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