Shares of S&P Global (SPGI) experienced a significant rally following the company’s fourth-quarter earnings report, which surpassed Wall Street’s expectations. For the period ending December 31, the financial services intelligence leader reported a 14% increase in quarterly revenue year-over-year, along with a 20% rise in adjusted earnings per share (EPS) to $3.77. Additionally, S&P Global announced a promising outlook for the upcoming year alongside a new share buyback authorization, providing further positive news for shareholders.
S&P Global, known for its expertise in financial analytics including credit ratings, investment research, and index data, has benefited from a resilient economic environment and positive investor sentiment toward capital markets. A key performance metric, billed issuance—a measure of credit instruments rated—reached a record $3.9 trillion in 2024, marking a 54% increase from the prior year. This growth reflects favorable market conditions driven by tight credit spreads and lower interest rates.
Revenue growth of 31% year-over-year in 2024 from ratings highlights the company’s diversification beyond its traditional focus on investment-grade and high-yield debt into other loan types and structured products, resulting in a 62% revenue increase in this category compared to the previous year. S&P Global also reports strong interest in its new offerings, such as the Vitality Index, including products like the CARFAX Car Listings data tracker and Energy Transition intelligence.
A significant development for S&P Global has been integrating artificial intelligence (AI) across its operations, introducing tools like the Spark Assist generative AI co-pilot, designed to boost user productivity and the platform’s value. Management is optimistic that these innovations position the company for sustained, profitable growth. For 2025, S&P Global projects revenue growth between 5% and 7%, compared to the strong performance in 2024. The target range for adjusted EPS is set at $17.00 to $17.25, representing a 9% increase at the midpoint from the previous year’s $15.70.
S&P Global’s stock appeal as a potential investment lies in its essential data products and credit ratings, which are crucial for the daily operations of institutional investors, banks, and asset managers. The company’s consistent financial performance, characterized by steady cash flows and high-quality earnings, supports its premium valuation. Trading at 31 times its 2025 EPS estimate, the forward price-to-earnings (P/E) ratio for S&P Global is slightly discounted compared to industry peers like Moody’s and MSCI, which trade at forward P/E ratios of 37 and 34, respectively.
S&P Global is distinguished as a “Dividend King,” boasting a 52-year history of increasing its dividend payments. The current quarterly rate of $0.96 per share yields 0.7%, complemented by a $4.3 billion share repurchase authorization, reflecting the company’s commitment to shareholder returns.
The company anticipates a positive trajectory for 2025, with its potential bolstered by broader trends in the financial services sector. As long as capital markets remain stable and asset prices continue to rise, S&P Global is well-positioned to meet its earnings goals. Investors with confidence in the company’s ability to consolidate market share have compelling reasons to consider S&P Global stock for long-term investment.
