S&P Global Belongs on Your Watchlist

S&P Global

We investors need good nerves at the moment. The price reactions when a company fails to meet expectations are sometimes hard to comprehend. But even if the quarterly results are better than expected, rising prices are by no means guaranteed. The share of S&P Global (SPGI), for example, lost ground last week, although the company presented very decent figures. Even though the stock is not quite out of the woods yet, you should put this stock on your watchlist.

S&P Global: Leading Information Provider For The Financial Sector

We all know the S&P 500, the most important American stock index. The company behind this index, however, is probably not familiar to all of you. We are talking about S&P Global. You may have heard the company’s old name before. Until April 2016, the group operated under the name McGraw Hill. 

The media conglomerate, which was came about in 1917 by the merger of McGraw and Hill’s Companies, slid into finance in 1966 with the acquisition of Standard & Poor’s. In November 2012, the company divested its McGraw-Hill Education publishing division and subsequently focused fully on its McGraw Hill Financial business. This was followed in 2016 by a rebranding as S&P Global.

Today, the company employs around 23,000 people and is one of the leading information service providers for the financial sector. The most important segment, which is responsible for around half of revenues, is the strong ratings business. Here, Standard & Poor’s is the global market leader ahead of its competitor Moody’s.

In addition, S&P Global operates various online databases and the index business S&P Dow Jones Indices. The consulting business is also becoming increasingly important.

New Records For Sales And Profits

Last week before the start of trading, S&P Global presented results for the fourth quarter and full year 2021. In the final quarter, the group reported a 12% increase in revenue to $2.09 billion. Net income jumped 49% to $675 million. Earnings adjusted for one-time items grew 16% to $3.15 per share. Analysts had expected earnings of only $3.13 per share and revenues of $2.05 billion.

For the full year, S&P Global increased revenue 11% to $8.30 billion. Net income improved 29% to $3.26 billion, also a new record. Another positive development is that the antitrust authorities have now given the green light for the acquisition of financial data provider IHS Markit, which was announced just over a year ago. Nothing now stands in the way of the deal being concluded in the near future.

Bottom Formation Still Ongoing

S&P Global remains on course for growth. Analysts forecast average earnings increases of 10% per year over the next five years. The prospects are good. However, the chart technique does not give a green light at the moment.

During the correction, the share price fell back below the 200-day line, which indicates the medium-term trend. After a short countermovement, the price recently fell again. It’s important that the January correction low at 391 dollars holds. The key resistances are the recent interim high at a good $423 and the 200-day line, which is currently at $432.

From a trend perspective, it’s advisable to wait and see whether the return above the moving average is successful. In this case, the lights for a resumption of the long-term uptrend jump to green. The first target is then the all-time high reached in December at $484.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

Related Articles