Has S&P Global’s Expansion Into Environmental Data Shifted Its True Value in 2025?
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Wondering if S&P Global is undervalued, overpriced, or somewhere in between? Let’s break down what is driving the conversation for curious investors.
S&P Global’s stock has experienced slight momentum recently, up 1.1% in the last week and 1.5% over the past month. However, it is down 3.8% over the past year.
Recently, S&P Global made headlines with its expansion into environmental data services and its acquisition of a fintech analytics startup. These developments give investors new factors to consider and may have influenced some of the latest price shifts. Regulatory moves affecting the ratings industry have also drawn attention, adding another layer to the debate around the company’s future prospects.
The company has a valuation score of 1 out of 6, meaning it is scoring low on undervalued signals at the moment. We will look at what this means across a few popular valuation approaches, and later, provide a more comprehensive way to assess S&P Global’s true value.
S&P Global scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Excess Returns valuation model examines how efficiently S&P Global turns shareholder equity into profits above its cost of equity. This method looks beyond accounting profits and focuses on whether the company’s returns truly exceed what investors demand for their capital at risk.
S&P Global currently has a Book Value of $109.21 per share and a stable expected EPS of $19.45 per share, based on weighted future Return on Equity estimates from four analysts. The company’s Cost of Equity stands at $9.35 per share, while its calculated Excess Return is $10.09 per share. These figures produce an average Return on Equity of 17.24%. Analysts expect S&P Global’s stable Book Value to reach $112.81 per share, based on projections from five separate analysts.
Applying these factors, the Excess Returns Model suggests S&P Global is trading around 59.2% above its estimated intrinsic value, indicating the stock is heavily overvalued according to this framework.
The price-to-earnings (PE) ratio is the preferred multiple for valuing well-established, profitable companies like S&P Global. It provides a quick snapshot of how much investors are willing to pay for each dollar of the company’s earnings, making it particularly relevant for businesses with consistent profitability.
Interpreting the PE ratio involves factoring in growth prospects and risk. Higher growth companies typically trade at elevated PE ratios, as investors anticipate rising earnings in the future. Conversely, greater uncertainty or risk can push the “fair” PE multiple lower, as the market demands a bigger discount for taking on risk.
S&P Global currently trades at a PE ratio of 35.8x. This is notably higher than both the Capital Markets industry average of 23.9x and the peer group average of 31.7x. Simply Wall St’s proprietary “Fair Ratio” for S&P Global is calculated at 18.2x, representing what would be considered reasonable for the company given its unique mix of earnings growth, profitability, industry position, and assessed risks.
The Fair Ratio stands out because it goes beyond generic peer or industry comparisons. By factoring in company-specific growth, profit margin, scale, and risk profile, it presents a more nuanced benchmark tailored to S&P Global’s actual fundamentals.
With a current PE ratio almost double its Fair Ratio, S&P Global appears clearly overvalued using this lens.
Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is simply your investment story, a way to describe how you see S&P Global’s future by connecting real forecasts for revenue, earnings, and margins with your own fair value estimate. Narratives link the company’s story to a financial forecast, allowing you to see how your assumptions translate into a clear and actionable fair value for the business.
Narratives are easy to use and available to everyone on Simply Wall St’s Community page, where millions of investors share their perspectives. They help you decide when the fair value you estimate compares to today’s market price. Narratives update dynamically to reflect the latest news and earnings, so your insights always stay relevant. For example, one investor might have a highly optimistic Narrative for S&P Global and see a fair value of $700 per share, while another might take a cautious view and calculate just $350.
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.
Companies discussed in this article include SPGI.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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