S&P Global (SPGI) Stock Looks Fairly Valued After Its 23% Fall

S&P Global has seen its share price fall sharply this year, and that slide puts fresh focus on whether the stock price still lines up with the returns the business earns on its capital. Investors now have to weigh a weaker recent chart against a company that is trying to extend its franchise into new parts of the financial system.

• The stock is down 22.8% year to date, which puts the question of what investors are paying for its return on capital front and center.
• The move to acquire OpenZeppelin and deepen crypto risk assessment can influence expectations for how efficiently S&P Global can deploy capital into higher value analytics over time.
• What if you looked at S&P Global through its earnings instead? See why S&P Global's 23.7x P/E tells a different valuation story.

The issue now is whether the current share price is justified by the returns S&P Global earns on the capital it invests in its ratings, data and newer digital risk platforms.

To pressure test whether S&P Global’s recent slide aligns with the returns it earns on its capital, it can help to compare it with other companies screened using 32 high quality undervalued stocks

Does S&P Global Look Fairly Valued on Excess Returns?

The Excess Returns model starts by asking how efficiently S&P Global turns shareholder capital into profits over time. Here the framework uses a book value base of $106.86 per share and a stable EPS estimate of $21.36 per share, which are both grounded in weighted forecasts from five analysts rather than a single heroic guess. With an average return on equity of 19.51% and a cost of equity of $8.91 per share, the model attributes an excess return of $12.45 per share on that capital, and a stable book value path toward $109.48 per share.

Taken together, those inputs indicate that the intrinsic value estimate from the Excess Returns model is broadly in line with where the stock trades today at $395.92. The acquisition of OpenZeppelin, which pulls S&P Global further into crypto and smart contract risk assessment, fits this picture because it leans into higher value analytics that the model already assumes can earn returns above the equity hurdle over time. That alignment between quality metrics and price is what the detailed output behind this summary is designed to show. Find out what S&P Global could be worth using our Excess Returns estimate.

The S&P Global Narrative: What Would Justify Today's Price?

Narratives on S&P Global sit between the numbers and the story, explaining which paths for revenue growth, margins and earnings would need to occur for the share price to end up meaningfully higher or lower than it is today on Simply Wall St's Community page. Where a ratio or model gives a single figure, Narratives unpack the future assumptions behind it so you can watch how those expectations hold up over time.

Community views on S&P Global split between those who see more upside in the business model and those who think recent headwinds justify restraint.

Bull case: 24% undervalued

"The vibrant equity and debt markets that previously supported strong IPO, M&A and debt issuance activity continue to matter because management now cites an 8 trillion dollar maturity wall through 2028…"

Discover why this Narrative puts S&P Global at 24% undervalued.

Bear case: roughly fairly valued

"The traditional value proposition faces pressure from the increasing accessibility of information through APIs, automated tools, and large language models…"

Explore why this Narrative puts S&P Global at roughly fairly valued.

One more S&P Global check that sits beside the price tag

Before feeling comfortable with any valuation work on S&P Global, it helps to look at who is steering the business and how their pay packets line up with shareholder outcomes. See who runs S&P Global and how they are paid.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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