Is It Time To Reassess S&P Global (SPGI) After Recent Share Price Pullback
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If you are wondering whether S&P Global is fairly priced or offering value right now, it helps to start by looking closely at how the current market price stacks up against a few different valuation checks.
The stock last closed at US$441.88, with returns of 5.8% over 7 days, a 16.3% decline over 30 days, a 13.8% decline year to date, a 16.6% decline over 1 year, and gains of 30.8% over 3 years and 37.7% over 5 years.
Recent attention on S&P Global has focused on its role as a key provider of indices, ratings, benchmarks and financial data. This often comes into focus when market sentiment shifts around interest rates, credit conditions or passive investing flows. As these themes move in and out of the headlines, they can influence how investors think about the durability and pricing of S&P Global’s services.
Simply Wall St’s valuation model gives S&P Global a score of 2 out of 6, meaning it screens as undervalued on two of the six checks we use. Next, we will walk through the main valuation approaches behind that score before looking at an even more complete way to think about value at the end of the article.
S&P Global scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Excess Returns model looks at how efficiently S&P Global turns shareholder capital into earnings, then compares those returns with the cost of equity to estimate what the shares could be worth today.
For S&P Global, the model uses a Book Value of US$104.17 per share and a Stable EPS of US$21.07 per share, based on weighted future Return on Equity estimates from 5 analysts. The Average Return on Equity is 19.79%, compared with a Cost of Equity of US$8.54 per share. That gap feeds into an Excess Return of US$12.53 per share, which is what the model treats as value created over and above investors’ required return. The Stable Book Value used in the calculation is US$106.44 per share, based on estimates from 4 analysts.
Putting these inputs together, the Excess Returns model arrives at an intrinsic value of about US$378.22 per share. Versus the recent share price of US$441.88, this indicates that, on this particular framework, S&P Global screens as 16.8% overvalued.
For a profitable company like S&P Global, the P/E ratio is a useful way to connect what you pay for each share with the earnings that underpin it. In simple terms, a higher P/E often reflects higher growth expectations or lower perceived risk, while a lower P/E can point to more modest growth expectations or higher risk.
S&P Global currently trades on a P/E of 29.53x. That sits close to both the Capital Markets industry average of 22.60x and the peer average of 29.76x, suggesting the market is pricing S&P Global broadly in line with similar names rather than at an extreme premium or discount.
Simply Wall St’s Fair Ratio for S&P Global is 18.94x. This is a proprietary estimate of what the P/E might be, given factors such as earnings growth, profit margins, industry, market cap and company specific risks. Because it pulls these elements together in one place, the Fair Ratio can be more tailored than a simple comparison with peers or the broad industry, which may have different growth or risk profiles. With S&P Global’s current P/E notably above the 18.94x Fair Ratio, the shares screen as overvalued on this metric.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simply your own story about a company tied to a set of numbers like fair value, revenue, earnings and margin estimates. Narratives can be explored on Simply Wall St’s Community page, used by millions of investors. Each Narrative links a view of S&P Global’s role in ratings, indices and AI data integrations to a concise forecast and fair value. It updates automatically as news or earnings arrive and helps you decide whether the current price looks attractive or stretched by comparing it with your assumed fair value. For example, one investor might build a Narrative around the higher fair value of about US$537.90 with expectations for revenue growth of 7.31%, net margins of 31.85% and a future P/E of 31.00x. Another investor might focus on a more cautious view closer to the lower analyst target of US$430.00. This reflects how different perspectives on competition, AI and issuance conditions can lead to different conclusions using the same shared toolkit.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
