Back to top

Image: Bigstock

S&P Global (SPGI) Stock Up 42.3% Year to Date: Here's Why

Read MoreHide Full Article

Shares of S&P Global Inc. (SPGI - Free Report) have gained 42.3% so far this year, outperforming the 11.9% growth of the industry it belongs to and 26.3% rise of the Zacks S&P 500 composite.

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s delve into factors that have contributed to the company’s outperformance:

Consecutive Earnings & Revenue Beat

S&P Global reported back-to-back earnings and revenue beat in 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.

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 expected to increase in low double digits.

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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other better-ranked stocks in the broader Business Services sector are Avis Budget (CAR - Free Report) and Cross Country Healthcare (CCRN - Free Report) ), both sporting a Zacks Rank #1, and Charles River Associates (CRAI - Free Report) ), carrying a Zacks Rank #2 (Buy).

Avis Budget has an expected earnings growth rate of 420.6% for the current year. The company has a trailing four-quarter earnings surprise of 76.9%, on average.

Avis Budget’s shares have surged 744.3% in the past year. The company has a long-term earnings growth of 18.8%.

Cross Country Healthcare has an expected earnings growth rate of 447.8% for the current year. The company has a trailing four-quarter earnings surprise of 75%, on average.

Cross Country Healthcare’s shares have surged 201% in the past year. The company has a long-term earnings growth of 21.5%.

Charles River Associates has an expected earnings growth rate of 61.2% for the current year. The company has a trailing four-quarter earnings surprise of 51%, on average.

Charles River’s shares have surged 119.3% in the past year. The company has a long-term earnings growth of 15.5%.

Published in