On Thursday, Citi initiated coverage on S&P Global (NYSE:SPGI) with a Buy rating and a price target of $600. The firm anticipates that S&P Global will continue to see positive momentum across its Commodities, Ratings, and Indices segments due to favorable market conditions. Additionally, the Mobility sector is expected to recover from the recall-related challenges it faced in 2023.
The analyst from Citi also foresees a turnaround in the Market Intelligence division, which has experienced mixed performance. Possible improvements could come from enhanced retention and pricing, as well as potential benefits from cross-selling opportunities and changes to the product portfolio. Furthermore, the Market Intelligence segment is likely to gain from an anticipated positive investment banking cycle in 2025. The company's strong financial position is reflected in its "GOOD" Financial Health Score on InvestingPro, supported by impressive revenue growth of 20.43% in the last twelve months.
Citi projects a low double-digit earnings per share (EPS) compound annual growth rate (CAGR) for S&P Global through 2027. This outlook is slightly more optimistic than the consensus. The rationale behind the $600 price target is based on a mid-30s price-to-earnings (P/E) ratio, which aligns with the historical market premium norms for S&P Global.
The coverage initiation reflects a confidence in the company's ability to navigate the current market landscape and capitalize on various growth opportunities in the coming years. The analyst's statement underscores multiple factors that could contribute to S&P Global's continued success and the expectation of a stable Ratings trajectory moving forward.
In other recent news, Moody's (NYSE:MCO) Corporation has seen notable developments. The company's third quarter of 2024 witnessed a 23% increase in revenue, reaching $1.8 billion, and a 32% rise in adjusted diluted earnings per share. These robust financial results were largely driven by the ratings business and transactional revenue, which surged by 70%.
Citi has initiated coverage on Moody's, setting a price target of $565 and highlighting a positive credit cycle. Citi's analysis suggests that Moody's is well-positioned to benefit from these market conditions, anticipating a low-teens earnings per share compound annual growth rate through 2027.
On the other hand, Baird has raised the price target for Moody's from $490 to $512, maintaining an outperform rating. Despite a softer performance from Moody's Analytics, the decision was influenced by Moody's Investor Service's excellent performance in the third quarter.
Additionally, Moody's has acquired Numerated Growth Technologies, a loan origination platform for financial institutions. This acquisition is expected to boost Moody's lending suite offerings, providing a more comprehensive solution for financial institutions navigating the digital lending landscape.
Lastly, RBC Capital Markets outlined a positive outlook for the Information and Commercial Services sector heading into 2025, a perspective that aligns with Moody's recent performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.