S&P Global Inc. (SPGI) — Coverage File

Data as of: Q2 2026 (quarter ended June 30, 2026); FY2025 10-K filed Feb 11, 2026; Mobility Global spin-off completed July 1, 2026 File last updated: October 10, 2026 (initial build; Bull & Bear memo logged)

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0. 30-second reopen

• Business: Owner of three market benchmarks (S&P credit ratings, the S&P 500 and other indices, Platts commodity prices) plus a data and workflow business (Market Intelligence); benchmarks are more than 80% of operating profit at roughly 50–70% adjusted margins on almost no capital.
• Core debate: Is 2026 the top of a three-way cycle (record issuance, rising equity markets, bond-funded AI capex), and does AI erode Market Intelligence, the segment that holds most of the goodwill?
• Base thesis: Ratings and Indices keep compounding through the cycle because issuers and asset managers cannot route around them, MI's proprietary data rides AI demand rather than being replaced by it, and more than all free cash flow goes back to shareholders.
• Main bear case: A ratings credibility failure in private credit or AI-infrastructure debt, or a 2022-style issuance slump hitting at the same time as an equity drawdown, after buybacks have pushed leverage above target; meanwhile MI Platforms slide toward no growth.
• What to watch: Billed issuance and the Q4 2026 comparison, Ratings transaction share and margin, MI organic growth split between Kensho Data and Platforms, Indices AUM and flows, and leverage against the 2.0–2.5x target into 2027.
• Valuation: ~$120B market cap, ~23x the 2026 adjusted EPS guide (Oct 9, 2026 web price) — priced as a steady compounder, not for a cyclical reset.

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1. Business snapshot

Since the July 1, 2026 spin-off of Mobility Global (CARFAX and automotive data, now NYSE: MBGL), S&P Global has four divisions [8-K Jul 2, 2026]. On FY2025 figures: Ratings $4.72B revenue, paid by issuers per deal (transaction, 52%) and through surveillance and annual relationship fees (non-transaction, 48%); Market Intelligence (MI) $4.92B, mostly subscriptions to Capital IQ, data feeds, RatingsXpress and workflow software such as Wall Street Office and ClearPar; Energy $2.30B, Platts price assessments, commodity data and the CERAWeek conference; Indices $1.85B, of which 65$322M of $1,271M in 2025) [FY2025 10-K].

Without Mobility, Ratings earned about 48% and Indices about 20% of 2025 segment operating profit (computed from the 10-K segment table). Management calls S&P "primarily a benchmarks business": Ratings, Indices, Platts and ratings data sold through MI make up nearly two-thirds of revenue and more than 80% of operating profit [Q2 2026 call]. From 2026, Credit Analytics moved from MI to Ratings and 451 Research and Maritime & Trade moved from MI to Energy, so 2026 segment lines are recast [Q2 2026 10-Q].

2. Core debate

The first question is how much of today's earnings is cycle. Billed issuance went from $2.54T in 2023 to $4.33T in 2025 and rose another 25% in Q2 2026, helped by about $169B of hyperscaler issuance in the first half [FY2025 10-K; Q2 2026 10-Q; Q2 2026 call]. Indices ETF AUM is up 34% in a year to $6.35T [Q2 2026 10-Q]. Both engines carry mostly fixed costs, so they amplify the cycle in both directions. Management points to $11T of rated debt maturing over the next 4.5 years as evidence the strength is not borrowing from the future [Q2 2026 call].

The second is whether AI makes MI's data more valuable or cheaper. S&P now sells its data into clients' own AI tools (Kensho LLM-ready APIs, MCP connectors) and reports that AI-using customers grow ACV 60% faster [Q2 2026 call]. Yet the desktop platforms, the bigger half of MI's main business line, grow only low single digits, and renewals with large clients are slowing over AI-use terms [Q2 2026 call].

3. Base thesis

S&P owns benchmarks that markets have to use: an SEC-registered rating agency whose ratings are written into mandates and regulation, the index family behind the largest pool of passive money (the first ETF to pass $1T tracks the S&P 500), and Platts price assessments that are licensed to commodity exchanges for derivative contracts [FY2025 10-K; Q2 2026 call]. Each extra bond, index-fund dollar or priced cargo costs little to serve, so revenue growth turns into margin: Ratings adjusted margin reached 68.5% and Indices 71.5% in Q2 2026 [Q2 2026 call]. Ratings revenue compounded 7.2% a year from 2016 to 2025 even through 2022 (computed from 10-Ks). Capex was $195M against $5.65B of operating cash flow in 2025, and all of the free cash flow, and more, goes back to shareholders [FY2025 10-K].

Assumptions this rests on:

1. The benchmarks keep their place and pricing: Ratings non-transaction revenue keeps growing about 6% a year (as it has since 2016) and Indices keeps winning flows [10-Ks; Q2 2026 call].
2. Rated issuance keeps growing on average across the cycle, from refinancing walls, AI infrastructure, private credit and M&A, and Ratings converts it at high incremental margin.
3. MI holds organic growth at about 6% or better as Kensho Data's growth offsets slower desktop Platforms, with productivity lifting MI's margin.
4. Free cash flow of about $5B a year keeps shrinking the share count, and leverage returns to the 2.0–2.5x target by end-2027 as guided [Q2 2026 call].

4. Main bear case

The bear case is paying a compounder's price at the top of the cycle. Ratings transaction revenue rose from 43% of Ratings revenue in 2023 to 56% in Q2 2026 [FY2025 10-K; Q2 2026 10-Q]. In 2022, Ratings revenue fell 26%, transaction revenue 45% and operating profit 36%, and revenue did not pass its 2021 level until 2024 [FY2022 10-K; FY2025 10-K]. Mix is already diluting growth: in Q4 2025 billed issuance rose 28% but transaction revenue only 12%, because investment grade pays less than high yield and bank loans [Q4 FY2025 call]. Growth is also coming from the least-tested credit: private-markets ratings revenue grew 60% in Q2 2026 while private credit faced "increased scrutiny, wider spreads, and elevated redemptions" [Q2 2026 call; Q1 2026 call].

How it breaks: defaults cluster in S&P-rated private credit or data-center debt and regulators act on the reliance, rotation or liability rules already under consideration [FY2025 10-K]; or a 2022-type issuance slump lands with an equity drawdown that cuts asset-linked fees, just after 2026's debt-funded buybacks. In parallel, MI Platforms slide to no growth as clients reach S&P data through their own AI rather than its desktop, and the capital tied up in the IHS Markit merger stays near a 3% pre-tax return.

5. Business quality

Very high in the benchmarks, ordinary in parts of MI. Ratings needs almost no capital: $1.14B of segment assets produced $3.01B of 2025 operating profit [FY2025 10-K]. Non-transaction revenue (surveillance, annual fees, Crisil) grew from $1.36B in 2016 to $2.25B in 2025 and fell only 2% in 2022, giving Ratings a recurring floor through the cycle [FY2016, FY2022, FY2025 10-Ks]. Indices had the most net inflows of any provider, more than $600B over the year, and won switches from other index providers in Q2 2026 [Q2 2026 call]. S&P DJI also receives a share of CME's profits on S&P equity-index futures under a license running from 2012 [FY2025 10-K].

MI is the weaker part. It carries $19.7B of S&P's $36.5B goodwill and $31.2B of segment assets but earned $991M of GAAP operating profit in 2025, about 3% pre-tax on assets (5% before $588M of acquisition amortization) [FY2025 10-K; computed]. On an adjusted basis MI's margin was 36% in Q2 2026 [Q2 2026 call].

6. Key value drivers

Ratings: billed issuance (by investment grade, high yield, bank loans, structured finance), the mix between them, pricing ("improved contract terms across product categories"), and growth in surveillance fees and private-markets ratings [FY2025 10-K; Q2 2026 call]. Indices: ETF and mutual-fund AUM (market level plus net inflows), exchange-traded derivative volumes, and data subscriptions; 2026 guidance assumes equity markets roughly flat from April levels [Q1 2026 call]. MI: subscription renewals and ACV (about 6% in Q2 2026), the split between Kensho Data (high single to low double digits organic) and Platforms (low single digits), and volume-driven revenue tied to capital markets [Q2 2026 call]. Energy: Platts price-assessment demand against sanctions and Middle East disruption; guided 4.5–6% for 2026 against a 6–8% medium-term range [Q2 2026 call]. Per share: buybacks and leverage.

7. Financial profile

FY2025 (including Mobility): revenue $15.34B (+8%), operating profit $6.48B including a $270M OSTTRA sale gain, net income attributable $4.47B, diluted EPS $14.66, operating cash flow $5.65B, free cash flow $5.14B (after capex and $321M of distributions to noncontrolling interests) [FY2025 10-K]. Buybacks $5.0B and dividends $1.17B, about 120% of FCF (computed); management cites 113% of adjusted FCF [Q4 FY2025 call]. Total debt rose from $11.4B to $13.1B, including a $2.5B accelerated buyback partly funded with commercial paper [FY2025 10-K; Q2 2026 10-Q].

H1 2026 (still including Mobility): revenue $8.32B (+10%), operating profit $3.81B (+22%, including a $172M MI disposal gain), FCF $2.25B [Q2 2026 10-Q]. Q2 adjusted margin was 54.3%, up 200bp [Q2 2026 call]. At June 30 total debt was $15.17B, of which $1.98B were Mobility notes that left with the spin; diluted shares were 295.5M, against 305.1M for FY2025 [Q2 2026 10-Q; FY2025 10-K]. 2026 guidance excluding Mobility: organic constant-currency revenue growth 6–8%, adjusted EPS $17.50–17.75, H2 adjusted FCF $2.9–3.1B; Ratings 5–8%, Indices 12–14%, MI 5.5–7%, Energy 4.5–6% [Q2 2026 call].

8. Valuation

The company gave no explicit EPS target beyond 2026 in sources; the November 2025 Investor Day medium-term targets are referenced on calls but the materials are not in sources/. At about 23x the 2026 adjusted EPS guide, the market is valuing S&P as a steady double-digit compounder. That multiple embeds today's issuance and equity-market levels; a 2022-type year in Ratings, with Indices fees falling alongside, would cut earnings by more than the revenue decline (§10 risk 3).

Market data (outside sources/, web, dated) Share price $407.82 at the Oct 9, 2026 close (after the Mobility spin-off); market cap ~$120.2B; 294.77M shares outstanding; TTM GAAP P/E 24.84 as shown by the site (stockanalysis.com, retrieved Oct 10, 2026). Derived by this file: ~23.0–23.3x the 2026 adjusted EPS guide of $17.50–17.75 [Q2 2026 call]; ~4.3% yield on 2025 FCF of $5.14B, which still included Mobility and so overstates the standalone yield. Gross debt excluding Mobility notes was ~$13.2B at June 30, 2026, before the planned $2B H2 issuance [Q2 2026 10-Q; Q2 2026 call].

9. Management & capital allocation

Martina Cheung has been CEO since November 1, 2024 and Eric Aboaf is CFO [2026 proxy]. The bench is turning over: MI president Saugata Saha left on July 30, 2026 and MI was reorganized under new leadership into Kensho Data and Platforms and Enterprise Solutions; Chief Legal Officer Steven Kemps retires at the end of 2026 [8-K May 26, 2026; 8-K Jul 6, 2026; Q2 2026 call].

Portfolio decisions have been sharp: Engineering Solutions sold (2023), the OSTTRA stake sold for $1.5B (2025), Mobility spun with a $2B dividend back to S&P, small MI assets sold, and Energy's upstream software portfolio being sold to SLB [FY2025 10-K; Q2 2026 10-Q; Q2 2026 call]. Acquisitions are now mid-sized (With Intelligence, $1.8B, 2025) or small (datacenterHawk, Agusto & Co.), and management says there is "no real appetite for transformational M&A" [FY2025 10-K; Q2 2026 call]. The larger historical decision, the 2022 IHS Markit merger, lifted diluted shares from 241.8M (2021) to 318.9M (2023) [FY2022 10-K; FY2025 10-K]. Capital returns have run above free cash flow: 2026 buybacks of more than $7B use the Mobility dividend and $2B of new debt, taking gross leverage to 2.7–2.8x against a 2.0–2.5x target [Q2 2026 call]. The dividend has risen for 53 consecutive years; the quarterly rate is $0.97 [Q4 FY2025 call; FY2025 10-K].

Pay: the 2026 annual bonus weights adjusted revenue 70% and adjusted EBITA margin 30% within its financial component; PSUs (70% of long-term awards) pay on three-year cumulative adjusted EPS, with no return-on-capital or TSR measure [2026 proxy]. The 2023–25 PSUs paid 182.23% of target; CEO 2025 annual compensation was $12.4M including long-term awards at target [2026 proxy]. Insider transaction data is not in sources.

Claims to verify over time:

• AI usage (API calls up 5x a quarter) turns into priced revenue through "consumption pricing" and dataset pricing [Q2 2026 call].
• Energy's 2026 slowdown is cyclical and growth returns to 6–8% after 2026 [Q2 2026 call].
• The Enterprise Data Office delivers $100M of savings (about 20% of its cost base) by end-2027; about 60% achieved [Q2 2026 call].

10. Risks ranked by damage

1. Ratings credibility failure in private credit or AI-infrastructure debt Damage rank: High · Permanence: High · Fixability: Low Mechanism: S&P grows fastest where structures are newest and competition loosest; a default cluster invites regulators to cut reliance on ratings, mandate rotation or raise liability, which hits price, not just volume. Evidence today: private-markets ratings revenue +60% in Q2 2026; private credit under scrutiny; Ratings legal costs $42M in 2025 vs $20M in 2024; reliance, rotation and liability rules listed as under consideration [Q2 2026 call; Q1 2026 call; FY2025 10-K]. What would confirm it: downgrade or default clusters in S&P-rated private credit or data-center deals, or an SEC or ESMA inquiry. Impact on value: Ratings is about half of segment profit; the damage would be multi-year.

2. AI erodes MI's desktop platforms Damage rank: High · Permanence: High · Fixability: Medium Mechanism: clients reach data through their own AI and MCP connections, so the desktop interface S&P sells loses value, and clients push for consumption pricing or build in-house to manage token costs. Evidence today: Platforms growing low single digits; MI 2026 guide 5.5–7% against a 7–9% long-term target cited in October 2025; Q2 MI subscription growth stayed at 6%, helped by a 10-year renewal; longer renewal cycles over AI terms; MI leadership change; the 10-K warns AI may make information "relatively inexpensive or free" [Q2 2026 call; Q3 FY2025 call; FY2025 10-K]. What would confirm it: MI organic growth below 5% or Platforms negative. Impact on value: about a third of revenue and most of the goodwill; low current returns on MI's capital stay low.

3. Cyclical peak in issuance and equity markets at the same time Damage rank: High · Permanence: Low · Fixability: High Mechanism: Ratings and Indices together are about 69% of segment profit with mostly fixed costs. Evidence today: transaction share 56% of Ratings revenue; management expected bond issuance to fall year on year in Q4 2026; asset-linked fees 65% of Indices revenue with ETF AUM +34% [Q2 2026 10-Q; Q4 FY2025 call; FY2025 10-K]. What would confirm it: two quarters of falling billed issuance, hyperscaler capex cuts, or a 20%+ equity drawdown. Impact on value: 2022 showed a 36% fall in Ratings profit; recovery took about two years.

4. Leverage and buybacks run ahead of cash Damage rank: Medium · Permanence: Low · Fixability: High Mechanism: buying back above FCF at peak earnings, then pulling back in a downturn, makes per-share value compound slower than reported EPS; pay on adjusted EPS rewards it. Evidence today: about 120% of FCF returned in 2025; more than $7B of 2026 buybacks; 2.7–2.8x leverage guided for end-2026 [FY2025 10-K; Q2 2026 call]. What would confirm it: leverage above 2.5x at end-2027. Impact on value: moderate; a policy choice that can be reversed.

5. Energy disruption and sanctions Damage rank: Low · Permanence: Low · Fixability: Medium Mechanism: the Iran conflict, tariffs and extreme volatility strain subscription renewals, conference revenue and Global Trading Services; S&P chose to be flexible on price for affected customers. Evidence today: Energy revenue +3% in Q2 2026; sanctions cost Platts 120bp of growth [Q2 2026 call]. What would confirm it: growth staying below 6% in 2027. Impact on value: small; Energy is about 15% of segment profit (computed).

11. Metrics to monitor

12. Thesis tripwires

13. Open questions

1. What are the Investor Day (November 2025) medium-term targets for each division? The materials are not in sources/.
2. How much Ratings revenue comes from hyperscaler and data-center issuance, and how much from private credit? Only growth rates and billed issuance are disclosed.
3. What is MI's retention rate and ACV in dollars? Only directional comments are in sources.
4. What happens to the Cboe license for S&P index options? An analyst raised its upcoming renewal; management declined to comment [Q2 2026 call].
5. How large are the "subscale" MI products management may exit [Q2 2026 call]?

14. Update log

15. Source map