Hook & thesis
S&P Global is not a flash-in-the-pan growth story; it is a tightly run information franchise that converts data into durable cash flow. The near-term narrative centers on two related value drivers: the company's push to standardize private-market data and the planned spin-off of Mobility into a standalone public company in 2026. If management executes both cleanly, the market should reward the remaining S&P Global with a higher multiple and clearer comparability - an outcome we can trade.
My trade idea: accumulate S&P Global at the market or on modest weakness and use a disciplined stop to protect capital. The spin-off and continued cash generation make a rerating to the low 40s on a price-to-earnings basis plausible; that supports upside to our long-term target. At the same time, the company is already trading at a premium multiple and execution risk around the separation and private-market product rollout justifies a tight stop.
What S&P Global does and why the market should care
S&P Global provides ratings, benchmarks, analytics and datasets across several verticals: Market Intelligence, Ratings, Commodity Insights, Mobility, Indices and Engineering Solutions. Its products are deeply embedded in capital and commodity markets and sell to firms that value accuracy and continuity. That sticky revenue mix helps convert sales into cash: free cash flow was $5.461 billion most recently, supporting buybacks, dividends and investment in new products.
The strategic lever we are focusing on is private-market standardization. Institutional investors, asset managers, pension funds and insurers are increasingly allocating to private markets but struggle with inconsistent data formats, fragmented disclosure and weak benchmarks. A vendor that standardizes and benchmarks private-market data - and then delivers workflow tools to price, risk-manage and report these holdings - can grow both product attach rates and recurring subscription revenue. For S&P Global, this is a logical extension of Market Intelligence + Indices + Ratings and could lift high-margin, recurring revenue over time.
Numbers that matter
- Current price: $527.90 (intraday reference).
- Market cap: ~$159.8 billion; enterprise value: ~$169.5 billion.
- Valuation metrics: P/E ~38x, P/S ~10.65x, EV/EBITDA ~23.5x.
- Profitability: return on equity ~12.7%, return on assets ~7.06%.
- Balance sheet: debt-to-equity ~0.34; current ratio ~0.98; cash/asset metric ~0.29 (from the ratios table).
- Cash generation: free cash flow $5.46 billion supports the dividend and future buybacks.
- Dividend: quarterly dividend was increased 1% to $0.97 (announced 01/14/2026), an annualized rate of $3.88 and a yield just under 1%.
Valuation framing
S&P Global trades at a premium multiple consistent with high-quality information businesses. A P/E near 38x reflects both recurring revenue and market leadership, but it also prices in continued outperformance. The company’s free cash flow of roughly $5.46 billion implies strong capacity for capital returns; if the post-spin parent can sustain margin expansion and organic growth from private-market products, re-rating into the low 40s on P/E seems reasonable.
Put another way: at $527.90 and EPS of $13.93, the valuation is demanding but not unrealistic for a company with entrenched data assets and cross-sell optionality. The Mobility spin-off could sharpen the market’s view of the core S&P business and compress the discount that diversified conglomerates often carry. That is the rerating thesis driving this trade.
Catalysts
- Mobility spin-off execution in 2026 - clarity on capital structure, distribution of intangible assets and ongoing commercial arrangements will determine how much value is crystallized.
- Product launches or partnerships around standardized private-market datasets and indices - early commercial traction will show the market this is more than roadmap rhetoric.
- Capital-return announcements (buybacks or opportunistic M&A) enabled by sustained FCF - evidence that excess cash will be returned or deployed accretively.
- Quarterly results showing margin expansion and recurring revenue growth in Market Intelligence and Indices segments.
Trade plan - actionable entry, stop, target and horizon
Trade: Long S&P Global (SPGI).
- Entry: $528.00 per share. This is effectively at today’s market level and allows immediate participation in any spin-off clarity.
- Stop loss: $492.00. If shares break below this level, the market is signaling that the rerating narrative is failing or macro pressure is too strong to support a premium multiple.
- Target: $610.00. This reflects a scenario where the core business re-rates modestly as private-market standardization gains traction and spin-off mechanics are executed cleanly.
- Time horizon: Long term (180 trading days). I expect meaningful re-rating to take time as product rollouts, customer wins and spin-off clarity materialize; use the long-term horizon to give the thesis room to play out. Monitor for an earlier mid-term catalyst: if a tangible private-market contract or index launch occurs, consider trimming position into that news (mid term - 45 trading days).
Rationale for sizing and horizon: the primary value unlock is structural and operational - it will not be fully appreciated in a handful of trading sessions. The 180-trading-day horizon gives time for spin-off paperwork, investor presentations, and early commercial proof-points. The $492 stop limits downside to roughly -7% from entry, while the $610 target implies ~+15.5% upside - an acceptable asymmetric risk/reward for a high-quality name with high cash generation.
Risks and counterarguments
Below are the main risks that could derail this trade:
- Spin-off execution risk: separation costs, tax issues, or an unfavorable allocation of assets/liabilities could create value leakage instead of value creation. If the market perceives the Mobility carve-out as messy, the parent could rerate lower.
- Macro and market multiple compression: at a P/E near 38x, broad market multiple contraction would hit S&P directly. In risk-off markets, premium information stocks often trade down sharply.
- Slower adoption of private-market standards: clients could resist migrating legacy workflows or delay large purchases, slowing revenue and margin benefits tied to standardization.
- Regulatory or competitive pressure: stronger regulation of benchmarks or an aggressive move by a large cloud/data competitor could compress pricing and limit margin expansion.
- Operational shocks: data outages, rating controversies or material revisions to large indices could impair reputation and revenues.
Counterargument: The main bear case is that S&P Global already trades at a premium for good reason - the company may simply continue to deliver consistent cash flow without a multiple expansion. If private-market products generate only modest incremental revenue or if the spin-off is value-neutral, upside will be limited and the stock may tread sideways. That outcome would still make SPGI a reliable cash generator and dividend payer, but it would reduce the return profile for this trade.
How I would change my mind
I will reduce or exit the position if any of the following occur:
- Clear evidence of botched spin-off mechanics (unexpected liabilities, unfavorable tax rulings or poor governance structures for the separated entities).
- Quarterly results showing material slowdown in recurring revenue growth or a drop in free cash flow below the cadence needed to support capital returns.
- Broader market dislocation that narrows liquidity for structured information names and pushes price below the $492 stop on heavy volume.
Conclusion
S&P Global is a high-quality, cash-generative information company with a credible path to extracting additional value through private-market standardization and a planned Mobility spin-off. Those moves create a plausible rerating scenario. The valuation is demanding today, so managing risk is essential: enter at $528.00, protect capital with a $492.00 stop, and hold for a long-term target of $610.00 while watching for early mid-term catalysts. If the spin-off and private-market products show tangible traction, this trade should pay off. If execution falters or the macro environment deteriorates, the stop preserves capital and allows re-evaluation.