TLDR
- S&P Global (SPGI) stock dropped 7.7% Tuesday after missing Q4 earnings estimates with adjusted EPS of $4.30 versus $4.33 expected.
- Q4 revenue rose 9% to $3.92 billion, matching analyst forecasts, driven by strong ratings and indices divisions.
- The company projects 2026 revenue growth will slow to 6.6%-8.6%, down from recent years.
- 2026 adjusted EPS guidance of $19.40-$19.65 falls short of Wall Street’s $19.96 consensus estimate.
- Analysts flagged concerns over weaker Ratings division growth outlook of 4-7% and free cash flow missing expectations.
S&P Global stock tumbled Tuesday as investors digested disappointing earnings results and cautious forward guidance.
The financial information provider reported fourth-quarter adjusted earnings of $4.30 per share. That missed Wall Street’s forecast of $4.33 per share.
Revenue climbed 9% to $3.92 billion for the quarter ending December. The number matched analyst estimates.
Full-year adjusted EPS reached $17.83, marking 14% growth from the prior year. But it’s the company’s outlook that has investors running for the exits.
S&P Global expects 2026 revenue growth to decelerate to a range of 6.6% to 8.6%. That’s a clear slowdown from recent performance.
The adjusted earnings forecast for 2026 landed between $19.40 and $19.65 per share. This implies growth of roughly 9.5%, well below last year’s 14% pace.
More importantly, the guidance missed consensus estimates of $19.96 per share.
Analyst Concerns Mount
BMO Capital’s Jeffrey Silber pointed out the company “reported a narrow EPS miss, though this was against a higher bar.” He expressed particular disappointment with the Ratings division.
The Ratings segment is expected to grow just 4-7% on an organic constant currency basis. Investors had hoped for stronger issuance and ratings activity in 2026.
Stifel’s Shlomo Rosenbaum described the results as “mixed” and warned the stock would likely face pressure. He highlighted lower-than-expected free cash flow as a concern.
Rosenbaum noted that revenue growth for three of the four operating units fell beneath prior strategic ranges. The guidance sits below medium-term targets provided in December.
AI Competition Weighs on Information Services
The stock has faced headwinds from AI-powered chatbots entering the financial information space. These tools are becoming increasingly tailored to legal and financial data needs.
CEO Martina Cheung tried to put a positive spin on the quarter. “We delivered a strong quarter driven by performance in all divisions, momentum in private markets, and expansion with our CCO clients,” she said.
Cheung highlighted AI integration as “a leap forward for our clients and the business.” She expressed confidence in the company’s strategy and business model.
The market wasn’t buying it.
Shares fell 6.6% in midday trading to $415 each. Pre-market trading saw declines as steep as 18%.
Competitors felt the pain too. MSCI dropped 4.15% while other financial data providers also traded lower.
The stock has entered bear market territory, down more than 20% from recent highs. The weak guidance compounds losses from last week’s broader selloff in information services stocks.
S&P Global’s forecast suggests revenue growth for 2026 will slow to between 6.6% and 8.6%, with adjusted earnings between $19.40 and $19.65 per share.
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