| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 276.10 | -48 |
| Intrinsic value (DCF) | 219.57 | -58 |
| Graham-Dodd Method | 1.20 | -100 |
| Graham Formula | 199.00 | -62 |
S&P Global Inc. (LSE: 0KYY.L) is a leading provider of credit ratings, benchmarks, analytics, and workflow solutions across global capital, commodity, and automotive markets. Headquartered in New York, the company operates through six key divisions: S&P Global Ratings, S&P Dow Jones Indices, S&P Global Commodity Insights, S&P Global Market Intelligence, S&P Global Mobility, and S&P Global Engineering Solutions. With a history dating back to 1860, S&P Global has established itself as a trusted source of independent credit ratings, market indices, and data-driven insights that empower investors, corporations, and governments to make informed decisions. The company serves a diverse clientele, including institutional investors, wealth managers, and businesses across industries such as energy, automotive, aerospace, and construction. S&P Global's comprehensive suite of solutions spans credit risk assessment, ESG and sustainability analytics, private market intelligence, and supply chain insights, positioning it as a critical enabler of global financial and commodity markets. Its flagship products, including the S&P 500 index, are widely recognized benchmarks in the investment world.
S&P Global presents a compelling investment case due to its dominant market position, diversified revenue streams, and strong cash flow generation. With a market capitalization exceeding $156 billion, the company benefits from high barriers to entry in the credit ratings and financial data sectors, coupled with recurring revenue from subscription-based services. Its 2024 financials show robust performance with $14.2 billion in revenue and $3.85 billion net income, supported by $5.69 billion in operating cash flow. However, investors should note the company's significant debt load ($11.93 billion) and exposure to cyclical financial markets, reflected in its beta of 1.23. The dividend yield, while stable at $3.69 per share, may be less attractive to growth-focused investors. The company's strategic focus on ESG analytics and emerging market data services positions it well for long-term growth, but competition from alternative data providers and regulatory scrutiny in the ratings business present ongoing risks.
S&P Global maintains a strong competitive position through its brand recognition, comprehensive data assets, and entrenched relationships in financial markets. The company's ownership of critical financial benchmarks like the S&P 500 creates significant network effects and switching costs for clients. Its Ratings division benefits from regulatory barriers to entry as a Nationally Recognized Statistical Rating Organization (NRSRO). However, the competitive landscape is intensifying with the rise of alternative data providers and fintech solutions. S&P Global's scale allows for substantial R&D investment ($124 million in capital expenditures), but smaller, more agile competitors are challenging its dominance in niche segments. The company's 2021 merger with IHS Markit significantly expanded its commodity and automotive data capabilities, creating cross-selling opportunities but also integration risks. Pricing pressure is emerging as clients seek to consolidate vendor relationships, though S&P Global's end-to-end workflow solutions provide some insulation. The company's main advantages lie in its reputation for data integrity, global coverage (particularly in emerging markets), and ability to combine ratings, indices, and analytics into comprehensive solutions. However, its traditional business models face disruption from AI-driven analytics and the growing importance of real-time data.