S&P Global Inc. (SPGI) stock intrinsic value fair value estimate & owner earnings analysis

S&P Global owns four businesses after spinning off its automotive data unit (Mobility, home of CARFAX) to shareholders on July 1, 2026: S&P Global Ratings, one of the two dominant credit-rating agencies; Market Intelligence (Capital IQ and financial data); Energy/Commodity Insights (Platts price benchmarks and energy research); and S&P Dow Jones Indices (the S&P 500 and Dow Jones indices, licensed to fund managers and exchanges). Most revenue is subscriptions or recurring fees. The exception is new-issue rating fees, which move with corporate bond issuance. How we measured earnings: we started from operating cash flow and took out working-capital timing swings, stock-based pay (treated as a real cost) and the capital spending needed to maintain the business. Capital spending is small, about 1.3% of revenue. On that basis, owner earnings were $3.87B in 2023, $5.11B in 2024 and $5.67B in 2025 ($18.57 per share in 2025). Earlier years belong to a smaller, pre-merger company: the IHS Markit merger closed in February 2022, and 2022 itself was distorted by merger costs and taxes on required divestitures. The roughly $1.07B a year of acquisition-related amortization is a bookkeeping charge, so it is added back. The acquired data businesses are kept up by ongoing operating spending and still grow organically, so we did not model them as wasting assets. The starting level: we value the business before its lenders, so we add back interest paid (about $390M a year). Our earnings base is the median of 2023 to 2025. That span runs from a weak bond-issuance year (2023, which also carried unusually high tax payments) to a strong one (2025). We take out the one-time $155M from closing interest-rate swaps in 2024 and an estimated $370M to $440M a year earned by the departed Mobility unit. Our Mobility figure rests on its reported 2025 free cash flow of about $461M. The result is about $4.94B a year of pre-interest cash earnings, or roughly $16.70 per share on 295.5M diluted shares. This is deliberately below 2025's roughly $5.6B, because 2025 was a strong year for bond issuance. Owner earnings grew 11% in 2025, and every case below assumes less growth than that for 2026. Base case ($416 per share): earnings grow 4.5% a year for five years, 4% for the next five, 3% in years 11 to 20 and 2% in years 21 to 30, then hold flat. The only growth we credit is pricing. S&P has a long record of raising prices each year on its subscriptions and rating fees, and its regulated rating franchise and benchmark indices have held their positions for decades. We give no credit for faster bond issuance, growth in index-fund assets, market-share gains or wider margins. For comparison, the company guides 2026 revenue growth of 6% to 8%. The business is worth about $142B. Of that, $10.7B belongs to CME Group, which owns 27% of S&P Dow Jones Indices, and the company owes about $8.8B net. That leaves about $123B for shareholders. Bear case ($232 per share): a bond-issuance drought like 2022, when Ratings revenue fell about a quarter, cuts earnings 10% below our base level for two years before they partly recover. After that, artificial-intelligence tools and cheaper data rivals hold Market Intelligence and Energy to little more than price increases (Energy grew only 2% in the second quarter of 2026), and fee pressure in index licensing slows Indices. Growth is 2% through year 10, 1% through year 20, flat to year 30, then shrinks 3% a year as the franchise erodes. The business is worth about $83B. After $6.3B for CME's stake and $8.8B of net debt, about $68B is left for shareholders. Bull case ($587 per share): 2025's higher earnings, about $5.6B before interest, prove to be the normal level, and pricing plus steady subscription growth deliver 6% a year for five years, 5% for the next five, 4% in years 11 to 20 and 3% in years 21 to 30, then hold flat. The business is worth about $197B. After $14.8B for CME's stake and $8.8B of net debt, about $173B is left. Debt: borrowings are about $13.2B, made up of $12.4B of bonds and $0.8B of commercial paper. Against that we set about $2.6B of cash beyond operating needs. We excluded the $2B of notes issued by Mobility Global, which left with it. Much of the bond debt is locked in at low fixed rates well into the future, including 2.3% notes due 2060, 2.9% notes due 2032 and 3.7% notes due 2052. That cheap financing is worth about $1.7B to shareholders, so net debt counts as about $8.8B. Maturities of about $1.7B in 2027 and $2.7B in 2029 are small next to more than $4B a year of cash earnings, even in the bear case. What could make this wrong: a longer issuance drought than 2022, AI tools eroding what customers will pay for data, regulatory action against rating agencies, or costs left behind by the Mobility separation. Two figures could not be confirmed from the filings available to us. The first is Mobility's exact historical cash earnings, which we based on its reported 2025 free cash flow. The second is how much of the $2B raised by Mobility Global was paid to S&P Global before the spin-off. We assumed most of it stayed with S&P Global. If none did, net debt would be about $1.7B higher, roughly $6 per share less in every case. Change since our last analysis: in August we valued the shares at $180, $358 and $557. Those figures included the Mobility business, which shareholders now own separately as Mobility Global shares, and that lowers this estimate. Offsetting this, we now apply the same 6% required return to every company instead of a company-specific rate, and we credit the company's low-cost long-dated debt. Our assumed growth is also more modest than before: 4.5% to start in the base case, versus 7.5% previously.