S&P Global Inc. (SPGI)

Total return at 5 years: 7.4%/year = 6.4% appreciation + 1.0% dividend. The target price ($563) is ex-dividend; the $23 in dividends collected over 5 years are added separately.

By both methods, the value today (DCF $487 · Multiples $472) exceeds the market price ($412).

Today — fairly valued: at $412 trades ~12.7% below its value discounted to today (~$472); the discount is positive but does not reach the margin of safety we require (≥38%).

At 5 years — En valor: the target price ($563) plus dividends yield between the 4% floor and the 10% average return — a reasonable return, though without the margin of a great investment.

The bridge: the return at 5 years exceeds the risk-free rate (4.5%) — but the discount does not reach the required margin of safety (≥38%). To require a 15% annual return, it would need to be bought at ~$295.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($412) is taken as given and it solves for what annual owner-earnings growth would need to hold for 5 years for the present value —at the method's rate (4.5%, no-growth terminal)— to equal that price. It is the disconfirmation test: the expectations the price already pays for, contrasted against the method's projection.

The market discounts less growth (2.8%/year) than we project (6.5%/year) → if the base case holds, there is margin: perception is more pessimistic than the estimated reality.

That growth implies ~$5.6 bn of owner earnings in year 5 (vs ~$6.7 bn of our base case). It recalculates if the DCF assumptions are edited.

Year-by-year projection of the selected scenario. From each year, two versions of the flow are derived: growth FCF (operating flow − total capex, the cash surplus) and maintenance FCF (the owner earnings: what the business yields if it only sustains its capacity). The flow is returned almost in full (dividend + buyback) or redeployed into the operation, so that EV stays roughly flat and multiples compress because the metric grows, not because of cash accumulation. The valuation is done on NOPAT (EV/NOPAT). In edit mode, revenue, margins, capex, and exit multiples can be adjusted.

Year 0 is fiscal year 2025 on a pro forma continuing-operations basis, taken from the unaudited condensed pro forma statements in the 8-K/A of 6 July 2026 (Exhibit 99.2): revenue 13,589 million, operating income 6,140 million and income attributable to S&P Global 4,192 million, already excluding the Mobility segment, spun off on 1 July 2026. No ex-Mobility rolling period was approximated: the pro forma statements present only full fiscal years and the first quarter of 2026, so the annual base is pro forma fiscal 2025, the most recent verifiable level for the company that remains. The valuation is at the enterprise level, on adjusted after-tax operating income: the metric is pre-interest, so the cash (US$1,866 million) and the debt (US$13,318 million) enter the bridge and the funding is charged only once. The adjusted base is defined here with only two adjustments, the only ones the pro forma statement discloses precisely: the amortization of acquisition intangibles is excluded (766 million in 2025, an accounting legacy of the IHS Markit purchase, a charge with no cash outflow) and gains on divestitures are excluded (273 million in 2025, mainly the sale of OSTTRA). Restructuring charges and transaction costs stay in, which is the more demanding treatment. On that basis year-0 adjusted earnings are 4,572 million, or 14.98 dollars per share on the 305.1 million average diluted shares for the fiscal year. Year 1 is anchored to current 2026 guidance from the 8-K of 28 July 2026, read through both of its anchors: organic revenue growth of 6 to 8 per cent and adjusted earnings per share of 17.50 to 17.75 dollars. The base case takes the revenue midpoint (7.0 per cent) and earnings compatible with that range once buybacks are accounted for; the bear and bull cases anchor to the extremes of the same range. The company's guidance runs on a broader definition of adjustment than this model's, which retains restructuring charges, so the model's earnings per share sits below the guided range by construction and the comparison is made on the rate of change, not on the level. Year-0 operating cash flow and capex are taken from the consolidated statement reported in 2025, because the pro forma set does not include a cash flow statement; it is a conservative reading, since the spun-off segment operated at a 21 per cent operating margin against 45 per cent for the remaining business. Cash does not accumulate: between buybacks and dividends the company returns more than its free cash flow, so the surplus is imputed through the explicit reduction in the share count.

Today's elevated multiple is the price of growth: if the business grows, the entry point cheapens on its own going forward (the metric grows while EV stays roughly flat). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—, so the value curve shows whether value creation is concentrated in the early or the later years. The required return is applied to the base scenario.

They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.

The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).

Each card fixes a required annual return and answers: if the business is worth $563 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $412, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.

With a target price of $563 in 5 years plus $23 of dividends collected (the dividend adds to the return, not to the price) and a required return of 4.5% annually, the maximum to pay today is $472. Against the current market price ($412), the margin of safety is 12.7% (trades below the maximum → there is margin) and the total return at that price would be 7.4% annually.

• Entry multiple. It trades at 26× on adjusted earnings, within the range where quality benchmark providers trade.
• Exit multiple. The blend of the four pieces comes to 22.6 times, compressing slightly against entry and within the archetype's 20-to-26 band.
• Metric base. It excludes only acquisition amortization and gains on divestitures; restructuring charges remain included.
• Estimated return. The estimated total return is +7% per year, +6% from appreciation and +1% from dividends.

• ✓ ROIC exceeds the cost of capital (~10%)
• ✓ CFROIC backs up the ROIC (99%, cash vs. accruals)
• ✓ Healthy balance sheet (low corporate debt)
• ✓ Durable competitive moat (multiple advantages)

• Return on capital. On consistent bases (pro forma numerator and denominator) the return comes to 14.8 to 17.3 percent, an excellent band; it only comes out low if the pro forma numerator is mixed with consolidated invested capital, which still includes Mobility.
• Cash generation. Operating cash flow close to 37 percent of revenue with capex at 1.4 percent: almost all profit converts to cash.
• Working capital. Favorable: close to 4,088 million in deferred revenue (consolidated balance sheet, FY2025 10-K) fund the operation because subscriptions are billed in advance.
• Reinvestment runway. Limited by design: the business does not absorb capital, so growth comes from price, volume and acquisitions.

Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.

The four businesses are measured with different drivers, and no single one serves for the group as a whole. Ratings is read by the amount of billed debt: 4.3 trillion dollars in 2025 after growing 11 percent, with investment-grade debt at 1.66 trillion and high-yield debt at 586,000 million. Indices is read by the assets that track its benchmarks, which closed 2025 at 5.48 trillion dollars in exchange-traded funds, 25 percent above the prior year. Market Intelligence is read by subscriptions and their renewal, and Commodity Insights by subscriptions to price assessments plus licensing royalties from commodity exchanges. The last dividend bar is the annualized rate of the 0.97-dollar quarterly amount approved by the board on January 14, 2026.

The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (31-dic-2025): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).

• Path anchor. Year 1 starts at the midpoint of the 6 to 8 percent guidance published on July 28, 2026, not at the filing's trajectory.
• Indices engine. Assets in exchange-traded funds indexed to its benchmarks grew 25 percent in 2025, to 5.48 trillion dollars.
• Ratings engine. Billed issuance reached 4.3 trillion after two years of strong recovery: the starting point is high, not low.
• Market Intelligence drag. It grew 5.8 percent in 2025, the lowest rate of the four pieces, and it carries the largest revenue weight.

• Revenue recurrence and predictability. Subscriptions and recurring surveillance sustain a good part of revenue; the transactional half of ratings does not.
• Differentiated product. It sells the institutional acceptance of an opinion and a benchmark, not an interchangeable input.
• Pricing power. High in ratings and indices; contested in subscription data, where the client has alternatives.
• Operating leverage. Adjusted operating margin of 48.8 percent with capex at 1.4 percent of revenue: additional revenue costs little.
• Recession behavior. Ratings' transactional revenue falls with debt issuance and indices revenue falls with the level of markets.

Not all debt is equal: only the structural needs refinancing; the rest is operational (self-liquidating).

Structural debt is what is exposed to the contraction phase of the cycle; operational debt (leases, matched funding) self-liquidates with the business.

• ✓Leverage (net debt / EBITDA)Net cash $0 bn
• ✓Interest coverage (EBIT / interest)23.0x
• –Liquidity (current ratio)no data
• ✓Cash quality (CFROIC vs ROIC)CFROIC backs 99% of ROIC
• !Value creation (ROIC − 10% bar)+2pp
• !Malinvestment test (capex vs incremental ROIC)Capex/D&A 2.0x
• –Float / working capitalNeutral WC
• ✓Dilution (SBC % of revenue + shares)SBC 1.7% of revenue

A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.

• Interest coverage. Operating profit covers the 288 million net interest expense more than twenty times over.
• Net debt. 13,318 million in debt against 3,663 million in pro forma cash, close to 1.5 times operating profit.
• Cash after the spin-off. The spun-off company transferred a net distribution of 1,974 million, which reinforces the starting cash position.
• Stock-based compensation. 1.4 percent of revenue: marginal, and in any case it is already expensed within the earnings being valued.

Who owns the shares — the alignment and whether there is a controlling shareholder.

• Track record. Executive leadership developed inside the company over fourteen years, with stints leading the two main franchises before taking office.
• Capital allocation. 15,100 million returned over three fiscal years between buybacks and dividends, with minimal capex, plus 2,023 million in net-of-cash acquisitions in 2025 —mainly With Intelligence for 1,800 million—, the second-largest use of capital in the year.
• Alignment. There is no controlling shareholder and the extracted proxy does not report aggregate ownership by directors and executives; the figure is disclosed as unverified.
• Perimeter simplification. It separated a profitable but differently natured business instead of retaining it, which is discipline, not shrinkage.

• Recent spin-off: the Mobility segment separated on July 1, 2026 and the company has not yet published a full fiscal year under the new structure. The figures circulating mix the prior consolidated base with the current one, and a company whose historical series has to be reconstructed by hand has fewer buyers than one whose screen closes on its own.
• The stock's decline is only explained to a minor extent by the mechanical effect of the spin-off: Mobility accounted for just 5.2 percent of pro forma operating profit. The rest of the decline is a genuine re-rating of the remaining business, with identifiable causes: the expected normalization of debt issuance after two exceptional fiscal years and the fear —not distinguished by the market between pieces— of data commoditization from artificial intelligence.
• The fear of data commoditization from artificial intelligence punishes the whole sector equally, without distinguishing between the business that sells information —which is indeed exposed— and the one that sells the institutional acceptance of a credit opinion or an investment benchmark, where the asset is not the data but the market's acceptance of it.

The earnings 8-K of July 28, 2026, later than the last period with available accounting tags, was incorporated: its organic growth guidance of 6 to 8 percent and adjusted earnings per share guidance of 17.50 to 17.75 dollars anchor year 1 of the path. It does not change the case relative to the reading of the annual filing: it confirms the trajectory rather than correcting it.

The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.

Even in the bear scenario, the return holds at -1%/year (-7% total): the margin of safety protects the downside. The bull (+13%/year, +81% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.

• AI commoditization. It is the threat the filing develops at greatest length, within cybersecurity and technology risks: already-trained models lower the barrier to entry and third parties could use its data to substitute its products.
• Debt issuance cycle. The transactional half of ratings tracks the volume issued and comes off two exceptional fiscal years.
• Regulation. Growing scrutiny of rating agencies and the European Union's and United Kingdom's financial benchmark regime with oversight from ESMA and the FCA.
• Market levels. Indices revenue is tied to the level of assets: a prolonged decline reduces it even if no one withdraws money.
• Reconstructed historical series. The company has not yet published a full fiscal year under the post-spin-off structure; this analysis is based on pro forma figures.

Each thinker's analytical framework applied to our data.

• Buffett / Graham Quality + margin of safety

  A wide moat and ROIC 12% above the 10% bar, but the margin is limited (+13%) → excellent business at a fair price.

• Peter Lynch Growth at a reasonable price (GARP)

  A stalwart growing 7% at a multiple/growth of 4.0 → expensive for its growth.

• Joel Greenblatt Cheap and high-return (Magic Formula)

  Earnings yield 5% (EBIT/EV) + ROIC 12% → brushes the Magic Formula.

• Howard Marks Perception vs reality + cycle

  The price discounts 3% vs our 7%: perception is more pessimistic than reality, with an identified source of the discount.

• Seth Klarman Capital protection (bear scenario)

  Bear-scenario floor -3%/yr, bull-scenario ceiling +12%/yr over 5y → capital protected, asymmetry in your favor.

• Pat Dorsey Moat strength (Five Rules)

  A wide moat, stable; sources: intangibles, switching costs, network effects, efficient scale → passes the Five Rules.

• Aswath Damodaran Expectations implied by the price

  Justifying the price requires discounting 3%, within what we project (7%) — the story squares with the numbers.