SPGI – Market expectations are for Uniform ROA to expand, but management may have concerns about growth opportunities, profitability, and initiatives
- S&P Global Inc. (SPGI) currently trades above corporate and historical averages relative to Uniform earnings, with a 38.4x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to expand to a record-high of 237%, accompanied by 3% Uniform asset growth going forward.
- However, analysts expect Uniform ROA to decline to 132% by 2022, accompanied by 8% Uniform asset growth.
- If sustained going forward, these levels would imply a stock price closer to $298, representing approximately 22% equity downside for the firm.
- Moreover, the firm’s most recent earnings call suggests management may have concerns about growth opportunities, profitability, and their initiatives.