SPGI – Market expectations are for Uniform ROA to expand, but management may have concerns about the IHS Markit Merger, ESG, and global growth drivers

• S&P Global Inc. (SPGI) currently trades above corporate and historical averages relative to Uniform earnings, with a 40.8x Uniform P/E (Fwd. V/E’).
• At these levels, markets are pricing in expectations for Uniform ROA to expand to a record-high of 243%, accompanied by 3% Uniform asset growth going forward.
• Meanwhile, analysts expect Uniform ROA to decline to 129% by 2022, accompanied by 8% Uniform asset growth.
• If sustained going forward, these levels would imply a stock price closer to $288, representing approximately 37% equity downside for the firm.
• Moreover, the firm’s most recent earnings call suggests management may have concerns about the IHS Markit Merger, ESG, and global growth drivers.