· SPGI
S&P Global: the toll gate of the bond market, now 21% cheaper than usual
Half of all credit ratings, the S&P 500 index and a data business under pressure from AI. S&P Global is in the buy zone. Why, and what could go wrong.
Anyone who issues a bond needs a rating. And that almost always comes from S&P or Moody's. According to the US Securities and Exchange Commission, S&P held 50% of all outstanding ratings at the end of 2023, Moody's 32% and Fitch 12%. Together, 94%.
That is the core of S&P Global. But the company is more than ratings.
Three businesses in one
| Segment | What it does | Growth Q3 2026 |
|---|---|---|
| Ratings | Credit ratings on bonds | +2% |
| Indices | S&P 500, Dow Jones and thousands more | +20% |
| Data and analytics | Market Intelligence, Capital IQ, Energy | +6 to +7% |
The index business is the hidden gem. Every euro that flows into an S&P 500 ETF, including my own SXR8, earns S&P Global a small fee. The more people invest passively, the more this business earns.
The numbers
- Revenue 2025: $15.3 billion, +8%.
- Adjusted operating margin: 50.4% in 2025, 53.5% in Q3 2026.
- Free cash flow 2025: about $5.5 billion, 36% of revenue.
- Share buybacks 2026: more than $7 billion expected, about 5% of the market value.
- Dividend: raised 53 years in a row.
Return on capital looks low on paper, around 10%. That is because of the 2022 IHS Markit acquisition, which put a lot of goodwill on the balance sheet. Before that deal it was above 80%. The underlying business is still exceptionally profitable.
Why it is cheap
In February 2026 the stock fell more than 25%, its worst month since 2009. Investors feared AI would make the data business redundant: if an AI assistant summarises company information for free, why would an analyst still pay for Capital IQ?
That fear is not unreasonable. But it mostly hits the least profitable part of the company. Ratings are protected by regulation: a pension fund cannot simply buy a bond rated by a chatbot. And the indices get stronger as more money flows into ETFs.
S&P Global responded on October 27 with a strategic review of Capital IQ, possibly including a separation. Mobility was already spun off on July 1, 2026. What remains is increasingly a pure ratings-and-indices company.
The price
The stock trades at about 24 times expected earnings. Its own 5-year average is 30. That is 21% cheaper, so by my rule S&P Global is in the buy zone.
What could go wrong
- The ratings cycle. 2025 was a record year for bond issuance. In Q3, ratings revenue grew only 2%. If issuance drops, growth drops with it.
- Indices depend on the market. The fees are a percentage of assets invested. In a crash, ratings and indices shrink at the same time.
- AI is still an open question. If Capital IQ is sold at a low price, shareholders lose value.
- Regulation. After 2008, rating agencies faced fines and stricter rules. A new credit crisis could bring political pressure again.
My conclusion
S&P Global passes my quality test and is in the buy zone. It is one of the first candidates for my quality sleeve. What I am still watching: ratings growth in Q4 and the outcome of the Capital IQ review.
Sources: S&P Global Q3 2026, full-year 2025 results, SEC report on rating agencies, valuation (stockanalysis.com).