1-Star Price
PREMIUM
5-Star Price
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Economic Moat
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Capital Allocation
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Wide-moat-rated S&P Global finished 2020 strong with revenue and earnings growth beating expectations. Strong ratings revenue drove a 6% revenue beat versus the FactSet consensus estimate, and adjusted earnings per share of $2.71 beat the consensus of $2.53. S&P Global’s stand-alone outlook was also solid, in our view. As we tweak our revenue and earnings estimates higher, we expect to meaningfully raise our fair value estimate on S&P’s shares.
S&P Global provides data and benchmarks to capital and commodity market participants. S&P Ratings, which constitutes over 40% of the firm's revenue and over 50% of the firm's operating income, is the largest credit rating agency in the world. The firm's other segments include Market Intelligence, Indices, and Platts. Market Intelligence provides desktop tools and other data solutions to investment banks, corporations, and other entities. Indices provides benchmarks for financial markets and is monetized through subscriptions, asset-based fees, and transaction-based royalties. Platts provides benchmarks to commodity markets, principally petroleum.
