Shares of S&P Global Inc. (SPGI - Free Report) scaled a new 52-week high of $278.20 in the trading session on Jan 3, before closing a tad lower at $276.91.
The company’s shares have charted a solid trajectory in recent times, appreciating 59.5% over the past year, ahead of the 44.7% growth of the industry it belongs to and 25.6% rally of the Zacks S&P 500 composite.
Notably, S&P Global has witnessed an 8% rise in share price since it posted third-quarter 2019 results.
Let’s find out what’s supporting the uptick.
Consecutive Earnings & Revenue Beat
S&P Global reported back-to-back earnings and revenue beat in the second and third quarters of 2019. While the company’s bottom line continued to gain from revenue growth and benefits of productivity initiatives, the top line performed well on the back of strength across all the segments namely S&P Global Ratings, S&P Global Market Intelligence, S&P Global Platts and S&P Dow Jones Indices.
Upbeat 2019 EPS Guidance
S&P Global raised its 2019 guidance for adjusted earnings per share in the last two reported quarters.
During third-quarter 2019, the company raised its full-year adjusted EPS guidance to $9.30-$9.40 from $9.10-$9.25 projected earlier.
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.
So far in 2019, the company has made acquisitions of 451 Research, Canadian Enerdata, Live Rice Index and Orion technology center. 451 Research is likely to strengthen S&P Global Market Intelligence's emerging technology expertise and offerings. Canadian Enerdata enhances S&P Global's Platts division's energy analytical capabilities and strengthens its foothold in North American natural gas market. Live Rice Index is a great addition to S&P Global’s Platts global agriculture offering. Orion technology center provides the company’s employees with access to the latest technologies and global communications infrastructure.
On Nov 21, 2019, S&P Global announced that it has inked a deal to acquire the ESG Ratings Business from RobecoSAM. Subject to customary closing conditions, the deal is expected to complete in the first quarter of 2020.
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.
Zacks Rank & Other Stocks to Consider
Currently, S&P Global carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Business Services sector are ICF International (ICFI - Free Report) , Accenture (ACN - Free Report) and Booz Allen Hamilton (BAH - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term expected EPS (three to five years) growth rate for ICF International, Accenture and Booz Allen Hamilton is 10%, 10.3% and 13%, respectively.
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