S&P Global Inc.
Financials · Capital Markets
Structural: quasi-monopoly position in three of five segments - Ratings (duopoly with $MCO controls ~80% of global credit ratings), Indices (S&P 500 is the global benchmark, ~$15T in indexed AUM pays bps to SPGI), Commodity Insights (Platts is the de facto energy price-discovery standard).
IHS Markit merger (closed Feb 2022, ~$44B) flipped the mix to ~75% recurring subscription. Operating margins 45-50% on data segments.
- Index licensing is a toll on every passive AUM dollar - ETF assets compound and SPGI gets paid per basis point, no incremental cost.
- Ratings volume tied to debt issuance - refi wall 2026-2028 (~$3T US corporate maturities) is mechanical tailwind.
- IHS Markit cross-sell of Capital IQ + Platts into single Market Intelligence platform; subscription net retention >105%.
- Pricing power: contractual price escalators 3-5%/yr across data products with no realistic substitute.
- Capital returns disciplined: $4B+ annual buyback + dividend post-merger deleveraging.
- Ratings segment cyclical to issuance volume; rate-shock or credit freeze (2022 playbook) compresses 20%+ of revenue overnight.
- Regulatory overhang on ratings duopoly persists (EU + SEC reviews recurring); not existential but caps multiple.
- AI disintermediation risk: $BBG-style proprietary data flows + open LLM-generated analytics could erode Capital IQ subscription value over 5-10y.
- IHS Markit integration tail still surfacing - divestitures (CUSIP, Engineering Solutions, OPIS) cleaner but distract from organic growth narrative.
- Premium multiple (~28-30x fwd P/E) leaves no cushion for any growth slowdown.
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