On Tuesday, Stifel adjusted its price target for S&P Global (NYSE:SPGI), increasing it slightly from $535.00 to $540.00 and maintaining a Buy rating on the stock. The firm highlighted a solid overall performance for the quarter, with particular strength in the Ratings segment due to favorable conditions in debt issuance.
S&P Global's recent performance was characterized by tight credit spreads and a modestly improved capital markets environment, leading to a robust quarter for Debt Issuance. The company has consequently revised its Billed Issuance guidance, now anticipating a 25% increase compared to the previous forecast of 6%-10% growth. Despite this, expectations include a slowdown in Billed Issuance for the second half of 2024, especially in the fourth quarter.
Stifel remains positive on S&P Global's prospects, citing a narrative of balanced growth and margin expansion. The firm's confidence is bolstered by S&P Global's strong free cash flow and consistent capital returns through dividends and share repurchases. In light of these factors, Stifel has revised its earnings per share (EPS) estimates for the company, raising the 2024 EPS estimate to $14.55 from $14.20 and the 2025 estimate from $15.80 to $16.00.
The new price target of $540 is based on the application of Stifel's established methodology to the updated, higher EPS estimates. This adjustment reflects the firm's continued optimism about the trajectory of S&P Global's business and its financial outlook.
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