S&P Global Inc.SPGINYSE

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DCF Valuation

DCF Valuation Summary

Strong Sell

Fair Value: $330.91 per share(market-calibrated)

-25.9%

Upside to Fair Value

Current

$446.47

Pure Model

$319.97

Fair Value

$330.91

Bull Case

$408.27

Bear Case

$242.02

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

5.00%

Calibrated Growth

3.12%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $319.97.

What's Driving This Ratingfor SPGI

✓

CapEx already efficient

CapEx at 0.76% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 42.07% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

→

Moderate revenue growth

Analyst consensus projects 7.54% revenue growth, fading to 2.50% by Year 10. Revenue reaches $25.4B (vs $15.3B today).

🎯

Market pricing in higher long-term growth

To justify $446.47, the market implies 5.00% perpetual growth — 250bps above the model's 2.50%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 78.18% indicates efficient cash generation. FCF reaches $9.6B by Year 10 (37.67% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.22

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.99%

Cost of Debt

Pre-tax Cost of Debt1.89%

Tax Rate22.60%

After-tax Cost of Debt1.46%

Equity Weight (E/V)90.55%

Debt Weight (D/V)9.45%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (90.55% × 9.99%) + (9.45% × 1.46%)

= 9.19%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$16.5B	$18.9B	$21.1B	$23.1B	$25.4B
EBIT	$6.9B	$8.0B	$8.9B	$9.7B	$10.7B
Tax	$1.6B	$1.8B	$2.0B	$2.2B	$2.4B
NOPAT	$5.4B	$6.2B	$6.9B	$7.5B	$8.3B
+ Depreciation	$1.0B	$1.2B	$1.3B	$1.4B	$1.6B
- Capex	$126M	$145M	$161M	$177M	$194M
- Δ NWC	$116M	$126M	$115M	$99M	$62M
Free Cash Flow	$6.1B	$7.1B	$7.9B	$8.7B	$9.6B
Discount Factor	0.916	0.768	0.644	0.540	0.415
Present Value	$5.6B	$5.4B	$5.1B	$4.7B	$4.0B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$9.6B

Terminal Growth Rate2.50%

WACC9.19%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$146.5B

PV of Terminal Value$60.8B

Exit Multiple Method

Year 10 EBITDA$12.2B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$146.7B

PV of Terminal Value$60.9B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$49.1B

PV of Terminal Value$60.8B

Enterprise Value$109.9B

(-) Net Debt$12.5B

Equity Value$97.5B

Shares Outstanding305M

Price per Share$319.82

Exit Multiple Method

PV of Projected FCFs$49.1B

PV of Terminal Value$60.9B

Enterprise Value$110.0B

(-) Net Debt$12.5B

Equity Value$97.6B

Shares Outstanding305M

Price per Share$320.13

Pure Model Fair Value

$319.97

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
7.19%	$396.72	$410.94	$428.20	$449.58	$476.76
8.19%	$346.09	$355.42	$366.39	$379.47	$395.35
9.19%	$306.15	$312.58	$319.97	$328.56	$338.66
10.19%	$273.53	$278.13	$283.33	$289.26	$296.07
11.19%	$246.21	$249.60	$253.38	$257.62	$262.42

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$242.02

-45.8% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.53

Base Case

$319.97

-28.3% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 1.22

Bull Case

$408.27

-8.6% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 1.04

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth7.54%

Year 3 Revenue Growth7.11%

Year 5 Revenue Growth5.76%

Year 7 Revenue Growth4.45%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin42.07%

Terminal EBIT Margin42.24%

Tax Rate22.60%

Historical Capex / Rev0.76%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 12x EV/EBITDA (Financial Services sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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