S&P Global, Inc.
The backbone of global capital markets — $14.2 billion in revenue from credit ratings, benchmark indices, commodity pricing, and financial data analytics that trillions of dollars depend on every single day.
Business Overview
What does S&P Global do, and why is it indispensable?
S&P Global is not just a financial services company — it is the operating system of global capital markets. When a government issues sovereign debt, S&P rates it. When an ETF tracks the market, it almost certainly uses an S&P index. When an oil tanker sets a price, it references Platts benchmarks. S&P Global's products are so deeply embedded in the financial system that the global economy literally cannot function without them.
The company traces its roots to 1860 and has evolved through 160+ years of strategic transformation. The 2022 mega-merger with IHS Markit ($44 billion) created the most comprehensive financial data and analytics platform on Earth, combining S&P's legacy in ratings, indices, and market intelligence with IHS Markit's strengths in commodity pricing, automotive data, and capital markets technology.
What makes S&P Global extraordinary is the mission-critical, recurring nature of its revenue. Credit ratings are legally required for most debt issuances. Index licensing is embedded in trillions of dollars of passive investments. Platts pricing is written into physical commodity contracts worldwide. These are not products customers choose — they are products customers must use.
The business model is capital-light and software-like. Capital expenditures are just $195 million (1.3% of revenue), meaning nearly all incremental revenue flows to the bottom line. The result is a free cash flow margin of 39% — one of the highest in the financial services industry — that funds continuous acquisitions, R&D investment, and shareholder returns.
Ratings & Market Intelligence
64% of revenue. Credit ratings for corporations, sovereigns, and structured finance ($4.4B). Market data, company intelligence, and industry analytics ($4.7B). The duopoly with Moody's commands ~80% of global ratings.
Indices
11% of revenue ($1.6B). S&P 500, Dow Jones, and thousands of benchmarks underpinning trillions in passive investments. 69% operating margins — the highest-margin segment. Growing 14% YoY as passive investing continues to gain share.
Commodity Insights & Mobility
26% of revenue. Platts commodity pricing and energy analytics ($2.1B) plus automotive data and analytics ($1.6B). Platts benchmarks are embedded in physical commodity contracts globally — the standard for oil, gas, metals, and agriculture pricing.
Financial Fundamentals
Three tests every quality business must pass
Moat Analysis
Five dimensions that determine competitive durability
Brand Loyalty & Pricing Power
9/10S&P Global operates in oligopolistic markets with extraordinary pricing power. The S&P 500 is the world's most-followed equity benchmark. S&P credit ratings are a regulatory requirement for most debt issuances — issuers pay for ratings because without them, borrowing costs would be significantly higher. This gives SPGI the ability to raise prices annually with minimal customer pushback across all five segments.
High Barriers to Entry
9/10Credit rating agencies require SEC registration as an NRSRO (Nationally Recognized Statistical Rating Organization) — a designation nearly impossible to obtain. Only three firms (S&P, Moody's, Fitch) hold meaningful global market share. The Indices business requires decades of track record to earn trust. Platts benchmarks are written into physical commodity contracts worldwide. Replicating any of these businesses from scratch would take decades and billions of dollars.
High Switching Costs
9/10Switching costs are enormous across all segments. Credit ratings are embedded in bond covenants and regulatory frameworks — changing agencies mid-cycle is virtually impossible. Trillions of dollars in ETFs and passive funds are legally tied to S&P indices. Market Intelligence data feeds are integrated into clients' trading systems, risk models, and compliance workflows. Ripping out S&P Global's products would require rebuilding entire operational infrastructure.
Network Effect
8/10Strong network effects across multiple segments. More companies rated by S&P increases comparability and data value for investors, attracting more issuers. More assets tracking S&P indices generates more data, enabling better index products, attracting more assets. The Ratings-Market Intelligence-Indices data flywheel creates a self-reinforcing cycle where each segment feeds the others. This cross-segment network effect is unique to SPGI's integrated platform.
Economies of Scale
8/10$14.2B in revenue with 49% adjusted operating margins and just $195M in capex. The business is fundamentally software-like: once a credit rating model, index methodology, or commodity benchmark is built, the marginal cost of serving additional customers is near zero. The IHS Markit merger created $600M+ in cost synergies. Each incremental dollar of subscription revenue drops almost entirely to the bottom line, enabling continuous margin expansion.
Bull & Bear Thesis
Both sides of the coin — so you can decide for yourself
Bull Case
Bear Case
Growth Drivers
Where the next wave of revenue comes from
Private Markets Expansion
Private credit, private equity, and alternative assets are growing faster than public markets. SPGI's private markets revenue in the Ratings segment is growing 30%+ YoY as more private issuers seek ratings for credibility and access to institutional capital. This represents a multi-decade structural shift with enormous revenue potential.
Passive Investing & Index Growth
The structural shift from active to passive investing continues to accelerate. Trillions of dollars in ETFs and index funds track S&P benchmarks, and every new dollar invested in a passive vehicle generates incremental licensing revenue. Indices grew 14% YoY in 2025 with 69% operating margins — the highest-margin business in all of financial services.
ESG & Sustainability Analytics
Mandatory sustainability reporting (SEC climate disclosure, EU CSRD, ISSB standards) is creating massive demand for standardised ESG data and climate risk analytics. S&P Global is positioned as the industry standard for climate transition risk assessment. ESG-related revenue is growing 30%+ with a total addressable market estimated at $50B+.
AI-Powered Analytics & Data Intelligence
SPGI is investing heavily in AI capabilities, including the ProntoNLP acquisition for textual data analytics. AI can unlock value in unstructured data across all segments — from automated credit analysis to real-time commodity intelligence. These higher-margin AI-powered products can drive operating leverage while making the platform stickier for clients.
Investment Risks
Every investment has risks — here is what could go wrong
AI Disruption & Data Commoditisation
Generative AI could potentially crack the proprietary "black box" of credit ratings and financial analytics, making data commoditised. If AI models can produce comparable credit assessments at lower cost, SPGI's pricing power erodes. The European AI Act classifies AI-driven credit scoring as "high-risk," requiring expensive compliance. Even modest disruption here impacts the premium valuation.
High SeverityRegulatory Tightening & Compliance Costs
Rating agencies face increased regulatory scrutiny and litigation risk globally. DOJ investigations, EU regulatory reviews, and potential new rules limiting pricing power or requiring data transparency could all impact profitability. Compliance costs continue to rise across all segments, particularly as ESG regulations face political uncertainty and potential reversals.
High SeverityGrowth Deceleration & Valuation Risk
Management guided for 6-8% organic revenue growth in 2026, down from historical mid-to-high teens. If the market reprices SPGI as a mature, slow-growth business rather than a compounding growth stock, the premium valuation multiple could compress significantly. Economic slowdowns could trigger simultaneous growth deceleration and multiple compression.
High SeverityCyclical Capital Markets Exposure
Ratings revenues are directly tied to debt issuance volumes, which can decline sharply during recessions or market freezes. Commodity Insights is exposed to energy trading volumes and commodity price cycles. Geopolitical conflicts (US-China tensions, Middle East instability) could freeze capital markets, creating short-term revenue headwinds across the highest-margin segments.
Medium SeverityValuation & Intrinsic Value
What is this business actually worth?
As of 18 February 2026, S&P Global, Inc. (SPGI) is trading at approximately 25% below its estimated intrinsic value based on our discounted cash flow model. With 49% adjusted operating margins, $5.6 billion in free cash flow, an oligopolistic position in credit ratings, and ownership of the world's most-followed equity indices, SPGI offers a compelling margin of safety despite the elevated leverage from the IHS Markit acquisition.
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This research is for educational purposes only and does not constitute financial advice. The information presented is based on publicly available data and our independent analysis. Always do your own research and consult a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.