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S&P Global (SPGI) Stock Up 35.5% Year to Date: Here's Why
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Shares of S&P Global Inc. (SPGI - Free Report) have gained 35.5% so far this year, ahead of the 16.2% growth of the industry it belongs to and the 19.9% rise of the Zacks S&P 500 composite.
Image Source: Zacks Investment Research
Let’s delve into the factors which have contributed to the company’s price performance:
Consecutive Earnings & Revenue Beat
S&P Global reported earnings and revenue beat in all the four quarters of 2020 as well as in the first and second quarters of 2021. While the bottom line gained from revenue growth and 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.
Upbeat 2021 Guidance
S&P Global raised its full-year 2021 guidance. The company now expects adjusted EPS in the range of $12.95-$13.15 compared with the prior guidance of $12.55-$12.75. The Zacks Consensus Estimate of $13.13 lies within the current guidance.
Free cash flow is anticipated between $3.5 billion and $3.6 billion compared with the prior guidance of $3.4-$3.5 billion. Revenues are anticipated to grow in high-single digits compared with the prior expectation of mid-single digits.
Acquisitions Bode Well
Acquisitions have been a key growth strategy for S&P Global, helping it continuously innovate, increase differentiated content and develop products.
In 2020, the company completed the acquisitions of the ESG Ratings Business (from RobecoSAM) and Greenwich Associates LLC. While the ESG Ratings Business is expected to boost S&P Global’s position as a premier resource for essential ESG data, ratings, benchmarks and insights, Greenwich can complement its existing product portfolio and expand its offerings to new segments across financial services, including commercial banks, and asset and wealth managers.
S&P Global is expected to continue adding advanced technology and data sets through acquisitions, which, in turn, should boost its top- and bottom-line growth.
Image: Shutterstock
S&P Global (SPGI) Stock Up 35.5% Year to Date: Here's Why
Shares of S&P Global Inc. (SPGI - Free Report) have gained 35.5% so far this year, ahead of the 16.2% growth of the industry it belongs to and the 19.9% rise of the Zacks S&P 500 composite.
Let’s delve into the factors which have contributed to the company’s price performance:
Consecutive Earnings & Revenue Beat
S&P Global reported earnings and revenue beat in all the four quarters of 2020 as well as in the first and second quarters of 2021. While the bottom line gained from revenue growth and 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.
Upbeat 2021 Guidance
S&P Global raised its full-year 2021 guidance. The company now expects adjusted EPS in the range of $12.95-$13.15 compared with the prior guidance of $12.55-$12.75. The Zacks Consensus Estimate of $13.13 lies within the current guidance.
Free cash flow is anticipated between $3.5 billion and $3.6 billion compared with the prior guidance of $3.4-$3.5 billion. Revenues are anticipated to grow in high-single digits compared with the prior expectation of mid-single digits.
Acquisitions Bode Well
Acquisitions have been a key growth strategy for S&P Global, helping it continuously innovate, increase differentiated content and develop products.
In 2020, the company completed the acquisitions of the ESG Ratings Business (from RobecoSAM) and Greenwich Associates LLC. While the ESG Ratings Business is expected to boost S&P Global’s position as a premier resource for essential ESG data, ratings, benchmarks and insights, Greenwich can complement its existing product portfolio and expand its offerings to new segments across financial services, including commercial banks, and asset and wealth managers.
S&P Global 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 (Strong Buy) Rank stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Gartner (IT - Free Report) , BGSF Inc. (BGSF - Free Report) and Avis Budget (CAR - Free Report) , each carrying a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Gartner, BGSF and Avis Budget is pegged at 13.5%, 20% and 27.5%, respectively.