S&P Global has unveiled plans to purchase the Automatic Identification System (AIS) data services business from ORBCOMM Inc. This acquisition targets the AIS division, renowned for its specialized satellite data solutions that enhance vessel tracking and improve maritime operational awareness for both governmental and commercial entities globally.
Since its inception in 2004, ORBCOMM’s AIS technology has been instrumental in delivering high-quality data through a combination of satellite and terrestrial networks. Its comprehensive solutions cater to various sectors, including supply chain management, maritime safety and security, environmental oversight, and regulatory compliance.
Post-acquisition, the AIS services will be affiliated with the S&P Global Market Intelligence sector. Furthermore, S&P Global has agreed to invest strategically in ORBCOMM, signaling a robust partnership aimed at innovating new supply chain data and insights. This strategic collaboration seeks to leverage the strengths of both companies to enhance their support for clients navigating the complexities of the maritime environment.
The transaction, which is contingent on standard closing conditions and regulatory approvals, is anticipated to finalize by 2025. However, the financial specifics of the deal remain undisclosed.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for S&P Global Inc (SPGI, Financial) is $585.43 with a high estimate of $629.00 and a low estimate of $520.00. The average target implies an upside of 24.50% from the current price of $470.23. More detailed estimate data can be found on the S&P Global Inc (SPGI) Forecast page.
Based on the consensus recommendation from 26 brokerage firms, S&P Global Inc's (SPGI, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for S&P Global Inc (SPGI, Financial) in one year is $536.00, suggesting a upside of 13.99% from the current price of $470.23. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the S&P Global Inc (SPGI) Summary page.
SPGI Key Business Developments
Release Date: February 11, 2025
- Revenue Growth: Increased 14% for the full year 2024, excluding Engineering Solutions.
- Adjusted EPS Growth: Increased 25% in 2024, exceeding guidance midpoint by over 13%.
- Margin Expansion: Expanded by over 300 basis points in 2024.
- Shareholder Returns: $4.4 billion returned through dividends and repurchase of 6.7 million shares in 2024.
- Adjusted Free Cash Flow: Targeting $6 billion in 2025, with a plan to return 85% or more to shareholders.
- Ratings Revenue: Increased 27% in Q4 2024, driven by refinancing activity and strong CLO volumes.
- Indices Revenue: Increased 21% in Q4 2024, with asset-linked fees up 31%.
- Commodity Insights Revenue: Increased 10% in Q4 2024, driven by energy transition products.
- Mobility Revenue: Increased 9% in Q4 2024, driven by CARFAX and insurance-related products.
- Market Intelligence Revenue: Increased 5% in Q4 2024, with improved retention rates.
- Energy Transition and Sustainability Revenue: Grew 23% to $104 million in Q4 2024.
- Private Market Solutions Revenue: Grew 29% to $146 million in Q4 2024.
- Vitality Index: $409 million in Q4 2024, representing 11% of total revenue.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- S&P Global Inc (SPGI, Financial) reported a 15% increase in revenue for 2024, excluding divested Engineering Solutions, with strong growth in subscription products.
- The company achieved a 25% growth in adjusted EPS, surpassing the midpoint of initial guidance by over 13%.
- S&P Global Inc (SPGI) expanded its margins by more than 300 basis points, demonstrating operational excellence.
- The company returned $4.4 billion to shareholders in 2024 through dividends and share repurchases, with plans for continued strong capital returns in 2025.
- S&P Global Inc (SPGI) is making significant investments in technology and AI, including the launch of new AI-driven products and enhancements to existing offerings.
Negative Points
- The company faces a highly competitive environment in financial services, with elevated price sensitivity impacting market intelligence.
- S&P Global Inc (SPGI) anticipates a challenging comparison for 2025 due to the record issuance year in 2024, which may affect growth expectations.
- There is caution and uncertainty around the macroeconomic environment, particularly in Europe and Asia, which could impact overall performance.
- The company experienced elevated expenses in 2024 related to incentive compensation and commissions, affecting margin expansion in some divisions.
- S&P Global Inc (SPGI) is dealing with market headwinds in its Market Intelligence and Mobility divisions, which could impact future growth.
