LSEG and Burberry shine as steady compounders amid market uncertainty

Panmure Liberum highlights London Stock Exchange Group (LSEG) and Burberry as "steady compounders" offering reliable growth amidst market uncertainty. LSEG's shift to a defensible data and analytics model, underscored by a 6.1% revenue increase in 2024 and projected H1 2025 revenue growth of 5.5% and operating profit growth of 7.7%, demonstrates its consistent performance. Concurrently, Burberry's shares have rallied 25% since Panmure's last recommendation, outpacing the sector as its "Forward" strategy stabilizes sales and improves analyst forecasts, signifying its re-emergence as a compounder. These companies are positioned as attractive long-term investments due to their ability to generate consistent earnings in volatile conditions.

Analysis

Panmure Liberum has identified London Stock Exchange Group (LSEG) and Burberry Group (BRBY) as 'steady compounders,' positioning them as resilient investments amid prevailing market uncertainty. LSEG's strength is attributed to its successful transformation into a global data and analytics provider, leveraging proprietary data from assets like FTSE Russell to create a defensible, end-to-end model with superior margins. This strategy is validated by a 6.1% revenue increase in 2024 and strong forecasts for the upcoming half-year results, which project 5.5% revenue growth and a 7.7% rise in operating profit. Concurrently, Burberry is presented as a successful turnaround story, with its stock rallying 25% and outpacing the sector since Panmure's last recommendation. The recovery is credited to its 'Forward' strategy, which has stabilized sales and driven a positive trend in analyst earnings upgrades. For both companies, the ability to generate consistent, repeatable growth underscores their appeal to investors seeking to build wealth through compounding during a period of significant policy, trade, and geopolitical risk.

Key Decisions for Investors

• Investors seeking long-term, resilient growth should consider LSEG and Burberry as potential core holdings, given their demonstrated ability to compound growth in uncertain market conditions.
• For LSEG, the upcoming half-year results are a key catalyst; verifying the forecasted 5.5% revenue and 7.7% operating profit growth will be critical to confirming the durability of its data-driven business model.
• For Burberry, continued positive momentum in analyst earnings revisions should be monitored closely as the primary indicator that its 'Forward' strategy is delivering a sustainable operational turnaround beyond the initial share price rally.