Shares of S&P Global Inc. (SPGI - Free Report) have gained 37.4% so far this year, outperforming the 19.5% growth of the industry it belongs to and 24.9% rise of the Zacks S&P 500 composite.
Let’s delve into factors that have contributed to the company’s outperformance:
Upbeat 2021 Guidance
S&P Global raised its full-year 2021 guidance. The company now expects adjusted EPS in the range of $13.5-$13.65 compared with the prior guidance of $12.95-$13.15. The current Zacks Consensus Estimate of $13.57 lies within the updated guidance.
Free cash flow is anticipated between $3.6 billion and $3.7 billion compared with the prior guidance of $3.5-$3.6 billion. Revenues are anticipated to increase low double digits.
Consecutive Earnings & Revenue Beat
S&P Global reported back-to-back earnings and revenue beat in all the past four quarters. While the bottom line gained from revenue growth and benefits of productivity initiatives, the top line performed well on the back of strength across all segments, namely S&P Global Ratings, S&P Global Market Intelligence, S&P Global Platts, and S&P Dow Jones Indices.
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 2020, the company completed the acquisitions of ESG Ratings Business (from RobecoSAM) and Greenwich Associates LLC. While the ESG Ratings Business is expected to boost the company’s position as a premier resource for essential ESG data, ratings, benchmarks and insights, Greenwich can complement its existing portfolio of products and expand its offerings to new segments across financial services, including commercial banks, and asset and wealth managers.
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.
Zacks Rank and Stocks to Consider
S&P Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) , Automatic Data Processing (ADP - Free Report) and FactSet Research Systems (FDS - Free Report) , each carrying a Zacks Rank #2 (Buy).
Avis Budget has an expected earnings growth rate of around 395.65% for the current year. The company has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 624.4% so far this year. The company has a long-term earnings growth of 27.5%.
Automatic Data Processing has an expected earnings growth rate of around 12.3% for the current fiscal year. The company has a trailing four-quarter earnings surprise of 9.7%, on average.
Automatic Data Processing’s shares have surged 29.7% so far this year. The company has a long-term earnings growth of 12%.
FactSet Research Systems has an expected earnings growth rate of around 9% for the current fiscal year. The company has a trailing four-quarter earnings surprise of 2.4%, on average.
FactSet Research Systems’ shares have surged 37.4% so far this year. The company has a long-term earnings growth of 8.5%.
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Shares of S&P Global Inc. (SPGI - Free Report) have gained 37.4% so far this year, outperforming the 19.5% growth of the industry it belongs to and 24.9% rise of the Zacks S&P 500 composite.
Let’s delve into factors that have contributed to the company’s outperformance:
Upbeat 2021 Guidance
S&P Global raised its full-year 2021 guidance. The company now expects adjusted EPS in the range of $13.5-$13.65 compared with the prior guidance of $12.95-$13.15. The current Zacks Consensus Estimate of $13.57 lies within the updated guidance.
Free cash flow is anticipated between $3.6 billion and $3.7 billion compared with the prior guidance of $3.5-$3.6 billion. Revenues are anticipated to increase low double digits.
Consecutive Earnings & Revenue Beat
S&P Global reported back-to-back earnings and revenue beat in all the past four quarters. While the bottom line gained from revenue growth and benefits of productivity initiatives, the top line performed well on the back of strength across all segments, namely S&P Global Ratings, S&P Global Market Intelligence, S&P Global Platts, and S&P Dow Jones Indices.
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 2020, the company completed the acquisitions of ESG Ratings Business (from RobecoSAM) and Greenwich Associates LLC. While the ESG Ratings Business is expected to boost the company’s position as a premier resource for essential ESG data, ratings, benchmarks and insights, Greenwich can complement its existing portfolio of products and expand its offerings to new segments across financial services, including commercial banks, and asset and wealth managers.
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.
Zacks Rank and Stocks to Consider
S&P Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) , Automatic Data Processing (ADP - Free Report) and FactSet Research Systems (FDS - Free Report) , each carrying a Zacks Rank #2 (Buy).
Avis Budget has an expected earnings growth rate of around 395.65% for the current year. The company has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 624.4% so far this year. The company has a long-term earnings growth of 27.5%.
Automatic Data Processing has an expected earnings growth rate of around 12.3% for the current fiscal year. The company has a trailing four-quarter earnings surprise of 9.7%, on average.
Automatic Data Processing’s shares have surged 29.7% so far this year. The company has a long-term earnings growth of 12%.
FactSet Research Systems has an expected earnings growth rate of around 9% for the current fiscal year. The company has a trailing four-quarter earnings surprise of 2.4%, on average.
FactSet Research Systems’ shares have surged 37.4% so far this year. The company has a long-term earnings growth of 8.5%.
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Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
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