Assessing S&P Global Shares After Sustainable Finance Push and Recent 3% Gain

Trying to figure out what to do with S&P Global stock? You’re definitely not alone. The shares have had an interesting run lately, climbing 3.3% over the past week, though they’re basically flat over the past month and down 1.4% year-to-date. If you zoom out, though, S&P Global has delivered some impressive long-term growth, returning more than 53% in the last three years and nearly 58% over the last five. That has a lot of investors wondering whether the recent sideways action is just a pause before the next leg up or a signal that something has shifted.

There is always something going on behind the scenes. Recently, S&P Global captured attention with its continued push into sustainable finance solutions and increased momentum in data analytics. Moves like these are meant to future-proof the business and keep it relevant for a world where markets and clients demand ever-richer data insights. That broader context matters when considering what the stock is really worth and what you might do next.

On a pure valuation basis, S&P Global currently gets a value score of just 1, meaning it only checks the 'undervalued' box in 1 out of the 6 areas tested. This signals that plenty of investors already prize the company’s quality and growth prospects, but it also raises the bar for future gains.

Let’s dig into the usual ways analysts judge whether a stock is fairly valued or not. You might be surprised how much they reveal and what they leave out. And if you’re looking for an even sharper approach, stick around for what’s coming at the end.

S&P Global scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: S&P Global Excess Returns Analysis

The Excess Returns valuation model works by examining how much value a company is creating above its cost of capital. It focuses on how effectively S&P Global turns shareholders’ investments into profits, with special attention to whether those profits exceed what investors require as a minimum return.

For S&P Global, analysts estimate a Book Value of $109.37 per share, with a Stable EPS (earnings per share) of $18.39, based on projections from five different analyst sources. The company’s Cost of Equity is $9.27 per share, which means S&P Global generates an Excess Return of $9.12 per share. Its average Return on Equity is a robust 16.33%, and the Stable Book Value is forecast to rise slightly to $112.62 per share.

Applying this model, the estimated intrinsic value of S&P Global comes out significantly below the current market price. The calculation indicates the stock is approximately 68.7% overvalued. This suggests investors are paying a substantial premium for the company’s quality and growth, far above what the excess returns model supports.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for S&P Global.

Our Excess Returns analysis suggests S&P Global may be overvalued by 68.7%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: S&P Global Price vs Earnings

The Price-to-Earnings (PE) ratio is often considered the gold standard for valuing profitable companies, since it shows how much investors are willing to pay per dollar of earnings. It is especially relevant for companies like S&P Global that generate consistent profits, making it a favored multiple among analysts and investors alike.

However, what counts as a “fair” PE ratio is not set in stone. If a company is expected to post rapid earnings growth, the market may justify a higher PE. Conversely, higher risk or slower growth should mean a lower PE. Factors like profit margins, stability, market leadership, and broader market sentiment all play a role in what investors are willing to pay.

S&P Global currently trades on a PE of 37.19x, which is considerably higher than both the industry average of 26.07x and the peer group average of 31.75x. Rather than focusing solely on these benchmarks, Simply Wall St calculates something called a “Fair Ratio.” In this case, the Fair Ratio is 20.20x, which reflects a custom multiple that blends the company’s future earnings growth, risk profile, margins, industry group, and market cap. This approach avoids the pitfalls of straight peer or industry comparisons and provides a more nuanced view based on the company’s real fundamentals.

Since S&P Global’s current PE is materially higher than its Fair Ratio, the analysis points to the shares being overvalued on this metric.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your S&P Global Narrative

Earlier, we mentioned there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is your personal story about a company, where you outline your viewpoint and back it up with your own estimates for fair value, future revenue, profits, and margins. This approach connects S&P Global’s broader story and opportunities to a direct financial forecast and a target value. It helps you see beyond just the numbers.

Narratives are simple to use and available right within the Simply Wall St Community page, which is used by millions of investors worldwide. By creating a Narrative, you compare your version of S&P Global’s fair value to its actual market price. This gives you a powerful tool to judge whether it’s time to buy, sell, or wait. Narratives update automatically when new facts or earnings are released, keeping your analysis up to date without any extra effort.

For example, one investor’s Narrative for S&P Global might assign a fair value of $420 per share while another sets theirs at just $320, based on their different expectations for the company’s growth and profitability.

Do you think there's more to the story for S&P Global? Create your own Narrative to let the Community know!

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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