S&P Global falls short of earnings and revenue expectations

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S&P Global Inc. ($NYSE:SPGI) released its earnings yesterday, and the results fell short of expectations. Adjusted EPS came in at $2.81, while the company guided for $11.35 to $11.55 for full-year 2022. This miss is likely to have a negative impact on S&P Global’s market and earnings in the long term.

Market Reaction

On Wednesday, S&P Global stock opened at $369.0 and closed at $368.2. While the company’s overall performance has been strong in recent years, this quarter was a miss. Investors will be watching to see if S&P Global can rebound in the next quarter.

VI Analysis

S&P Global is a strong company with a long-term potential, as reflected in its fundamentals. The VI Star Chart shows that S&P Global is strong in profitability, growth, dividend, and weak in asset. S&P Global has a high health score of 8/10 with regard to its cashflows and debt, indicating that it is capable of safely riding out any crisis without the risk of bankruptcy. S&P Global is classified as a ‘gorilla’, a type of company that achieved stable and high revenue or earning growth due to its strong competitive advantage. At the right price, it is suitable for those who want to invest for high capital gains. High growth companies are deemed more risky as they attempt to grow faster.

Summary

The company attributed the miss to lower than expected revenue from its Ratings business, as well as higher costs associated with its recent acquisition of IHS Markit. S&P Global has been on a tear in recent years, growing its business through a series of acquisitions. Given the company’s strong track record of growth, these expectations seem achievable. Investors considering an investment in S&P Global should be aware that the company faces some headwinds in the form of increased costs associated with its recent acquisition spree.

However, the company has a strong track record of delivering on its growth promises, and it remains a leader in the data and analytics space.