U.S. stocks edge higher; solid earnings season continues
On Tuesday, Stifel analysts increased the price target for S&P Global (NYSE:SPGI) shares to $629, up from the previous target of $560. The firm maintained a Buy rating on the stock, signaling continued confidence in the company’s performance. The analysts highlighted that the Ratings segment of S&P Global has been outperforming expectations, whereas the Market Intelligence segment has fallen slightly short, although there is a general sense of optimism for improvement throughout the year.
S&P Global’s stronger than anticipated Debt Issuance is seen as a positive indicator for the company’s future results. This optimism is shared ahead of the upcoming earnings release from Moody’s Corporation (NYSE:MCO), which is expected on Thursday morning. Stifel’s analysts remain cautiously optimistic about the Debt Issuance outlook, given the strong performance seen in 2024, but note that the positive trends could lead to a better market than currently projected.
The analysts also pointed out that an increase in mergers and acquisitions (M&A) activity or a more open initial public offering (IPO) window could potentially lead to more favorable market conditions than those they have modeled. They acknowledge the inherent difficulty in forecasting Debt Issuance but emphasize that the current trends are encouraging.
S&P Global’s recent performance, particularly in its Ratings segment, has been robust, providing a foundation for Stifel’s positive outlook. The analysts’ commentary reflects a belief that despite some segments not meeting expectations, the overall health of the company is strong, and there are opportunities for growth and improvement as the year progresses.
Investors and market watchers will be keeping a close eye on Moody’s Corporation’s results, due on Thursday, as they may provide further insights into the financial information and analytics industry’s outlook and S&P Global’s position within the market.
In other recent news, S&P Global reported an impressive fourth quarter, with earnings and revenues surpassing analysts’ estimates. The company posted adjusted earnings per share of $3.77, beating the consensus by $0.41, and quarterly revenue of $3.59 billion, a 14% increase year on year. The full-year 2025 revenue also saw a 14% rise to $14.21 billion, with adjusted EPS climbing 25% to $15.70.
The company’s performance was significantly boosted by growth across all segments, with the Ratings division standing out. S&P Global also issued an upbeat outlook for 2025, projecting revenue growth of 5.0% to 7.0% and adjusted EPS in the range of $17.00 to $17.25, surpassing the current analyst consensus.
Further, S&P Global revealed plans to return capital to shareholders, targeting to return 85% or more of adjusted free cash flow through dividends and share repurchases in 2025. The company’s board has authorized a quarterly cash dividend of $0.96 and approved a $4.3 billion share repurchase program. These are all recent developments and are significant to investors tracking the company’s progress.
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