S&P Global (SPGI) just hit our radar. And the numbers look really good right now.
SPGI trades around $507.57. But here's the thing: analysts put their average price target at $612.67.
That's about 12% upside from current levels.
The Business Model
S&P Global runs four main businesses:
Market Intelligence. They sell data and research to banks, hedge funds, and corporations. Think of it as the Bloomberg terminal's biggest competitor. Subscription-based. Sticky revenue.
Ratings. When companies or governments want to borrow money, S&P rates their creditworthiness. AAA is the best. D means default. Every major bond issue needs a rating. And S&P is one of only three agencies that matter.
Platts. They track commodity prices and energy markets. Oil traders rely on their data. So do refineries and shipping companies. Another subscription business.
Indices. The S&P 500. The Dow Jones. They create and maintain these benchmarks. Every ETF that tracks the S&P 500 pays them licensing fees. Pure passive income.
SPGI: Revenue Growth by Segment over 10 years
Here's what makes this special: All four businesses feed off each other. The ratings business gives them credit data. That data helps their market intelligence. Intelligence helps create better indices. It's a flywheel.
The Fair Price Story
SPGI Price Analysis
Let's talk numbers. Current SPGI price $507.57 (as of September 23, 2025).
Last year they made $14.7 billion in revenue and $4.01 billion in profits. That's a 27% profit margin.
Most companies would kill for those numbers.
But about 70% of their revenue is recurring. Subscriptions. Licensing fees. Ratings that need annual updates.
This isn't a business that starts from zero each quarter.
Valuation Metrics Supporting Fair Value
P/E Ratio Analysis:
Current P/E: 38.89 (as of September 22, 2025)
This is reasonable given SPGI's high-quality business model and consistent growth
For a company with SPGI's market position and recurring revenue streams, a P/E around 30 reflects fair value rather than overvaluation
Strong Fundamental Performance
Revenue Growth Trajectory:
2024: $14.2B (+13.7% vs 2023)
Consistent growth: $6.3B (2018) → $14.2B (2024) = 127% total growth
Strong compound annual growth rate demonstrates pricing power
Profitability Metrics:
Operating Margin Expansion: Operating income grew from $2.8B (2018) to $5.6B (2024)
EPS Growth: $7.80 (2018) → $12.36 (2024) = 58% increase
EBITDA Growth: Steady progression from $3.0B to $6.8B
SPGI: EPS Growth
High-Quality Earnings:
Net income of $3.9B in 2024 vs $2.0B in 2018
Consistent profitability with strong cash generation
Minimal discontinued operations, indicating focused business model
It’s a strong sign of a healthy, well-managed company.
Analyst's Take on SPGI
Joseph Carlson holds SPGI in both of his investment portfolios, calling it a company that has performed "fantastically".
In total, he has made around $35,000 in gains from his investment.
Carlson also pointed out a recent 6% sell-off in S&P Global’s stock, attributing it to a ripple effect from another company’s earnings report.
"This is an ultra-high-quality company. One that's heavily diversified. They have a credit rating business, they have a data business, they have an indices business. All of these are ultra-wide moat, and they'll continue to generate profits."
"This is an ultra-high-quality company. One that's heavily diversified. They have a credit rating business, they have a data business, they have an indices business. All of these are ultra-wide moat, and they'll continue to generate profits."
Why This Is Our Entry Point
Here's why we're buying now:
The business is stable. Credit ratings and data don't go away during recessions. If anything, they become more important.
Growth is built-in. As markets grow, S&P Global grows with them. More companies means more ratings. More trading means more data subscriptions.
The moat is wide. You can't just start a competing credit rating agency tomorrow. It takes decades to build trust and regulatory approval.
What We're Paying
At current prices, we're paying about 30 times forward earnings. For most companies, that would be expensive.
But S&P Global isn't like most companies.
They have recurring revenue. High margins. And a business that's been around for over 150 years.
The fair price? We think it's closer to that $612 analyst target. Maybe even higher over time.
Our Investment Thesis
We're investing because:
The price is right for a quality business
Top 12 analysts rate it a "Buy"
The moat keeps getting wider
Interest rates won't stay high forever (good for their capital markets business)
This isn't a get-rich-quick play. It's a buy-and-hold-for-years play. The kind of stock you add to your core portfolio and forget about.
The Bottom Line
SPGI at $507.57 looks like a fair entry point for a premium business.
We're not getting it cheap. But we're not overpaying either.
And in five years? We think we'll be happy we bought at these levels.
We're adding SPGI to our portfolio. This isn't financial advice, just our analysis. Do your own research before investing.
