S&P Global: A Mild Disappointment, or Just a Bargain?

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The other day, a curious spectacle unfolded on the exchanges. S&P Global (SPGI 9.69%), a purveyor of indices and ratings – a rather lucrative occupation, one might add – experienced a downturn. Nearly ten percent, if you please! A considerable sum, enough to make a small bureaucrat weep. Meanwhile, the S&P 500 itself merely dipped, a polite curtsy compared to S&P Global’s rather dramatic swoon. The cause? An earnings report that, shall we say, didn’t quite sing. It seems the market expects miracles these days, not merely robust performance.

A Quarter of Nearly Perfect Numbers

The company tallied nearly $3.92 billion in revenue for the last quarter, a nine percent increase. Not bad, not bad at all. One might even call it a respectable haul. Net income, calculated by methods that would likely confound a tax inspector, grew by twelve percent, reaching $1.3 billion, or $4.30 per share. A tidy sum, certainly.

The numbers were… almost what analysts anticipated. Revenue edged past the $3.9 billion estimate, but the adjusted earnings per share fell slightly short of the $4.32 consensus. A trifle, really. A mere rounding error in the grand scheme of things. Though, as any gambler knows, it’s often the small margins that separate fortune from ruin.

All revenue streams flourished, a testament to the company’s knack for extracting value from thin air. The indices business, predictably, performed well, growing by fourteen percent to $498 million. And the ratings service, ever the reliable cash cow, increased by twelve percent to nearly $1.19 billion. One wonders if the raters ever consider the companies they assess with the same scrutiny they apply to others. A philosophical question, perhaps best left for another day.

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A Whisper of Disappointment in Future Projections

S&P Global projected revenue growth of six to eight percent for the year, and earnings per share of $19.40 to $19.65. A reasonable forecast, one would think. However, the analysts, those oracles of the market, expected $19.96 per share. This discrepancy, a mere fifty cents, triggered the sell-off. It seems investors are easily spooked these days, preferring certainty to potential.

I, for one, consider this an overreaction. S&P Global isn’t producing spectacular results, no. But it’s consistently generating high-margin profits from a diversified business. A solid foundation, if ever there was one. The market, in its infinite wisdom, often mistakes a temporary setback for a fundamental flaw. A mistake, I believe, that presents an opportunity. I remain a buyer, viewing this dip as a chance to acquire a quality asset at a slightly more reasonable price. After all, even the most discerning investor appreciates a bargain.

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2026-02-11 01:52