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S&P Global (SPGI) Scales New 52-Week High: What's Driving It?

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Shares of S&P Global Inc. (SPGI - Free Report) scaled a new 52-week high of $268.55 in the trading session on Sep 6, before closing a tad lower at $267.75.

Shares of the company have charted a solid trajectory in recent times, appreciating 57.5% year to date, ahead of the 45.1% rise of the industry it belongs to and 17.4% increase of the Zacks S&P 500 composite.

 

Notably, the company has witnessed a 52.8% rise in share price since it posted second-quarter 2019 results.

Let’s find out what’s supporting the uptick.

Rising Demand for Business Information Services

S&P Global is gaining from increasing demand for business information services. Constantly increasing volume of data from private and government organizations has augmented the demand for improved enterprise-wide financial performance visibility. Higher demand for news, information, and analytics solutions will drive growth of the market. Further, the industry is benefiting from rising demand for risk mitigation. Changes in market dynamics are more or less a constant phenomenon and expose companies to credit fund as well as operational risks. Accurate market and financial information is required for risk mitigation, thereby spurring demand for business information services.

Strategic Acquisitions Bode Well

Acquisitions have been a key growth strategy for S&P Global, helping it continuously innovate, increase differentiated content and develop new products.

In 2019 so far, S&P Global has completed three acquisitions — Orion technology center in July; and Live Rice Index (LRI) and Canadian Enerdata Ltd earlier this month through its S&P Global Platts division. While Orion should provide access to the latest technologies and global communications infrastructure, LRI is likely to extend the portfolio of agricultural price assessments. Canadian Enerdata is expected to strengthen its natural gas offering across North America.

In 2018, the company acquired RateWatch, Kensho and Panjiva. RateWatch is a great addition to S&P Global’s bank data offering. The Kensho acquisition is helping S&P Global to improve its core operations by applying actionable insights through the use of AI solutions and sophisticated algorithms, thereby augmenting its efficacy. The Panjiva buyout enhanced the company’s Global Market Intelligence's data and analytical offerings for diverse customers across the globe, generating higher revenues.

The company is expected to continue adding advanced technology and data sets through acquisitions, which, in turn, should boost its top- and bottom-line growth.

Upbeat 2019 Guidance

S&P Global raised its 2019 guidance for adjusted earnings per share. The company now expects adjusted EPS in the range of $8.95-$9.15 compared with the prior guided range of $9.10- $9.25.

Zacks Rank & Other Stocks to Consider

S&P Global currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the broader Zacks Business Services sector are Huron Consulting (HURN - Free Report) , Charles River Associates (CRAI - Free Report) and Fiserv , each carrying a Zacks Rank #2. Long-term earnings (three to five years) growth rate for Huron Consulting, Charles River Associates and Fiserv is estimated to be 15.6%, 13% and 12%, respectively.

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