Strong momentum and positive outlook
SPGI delivered a very strong 4Q17 with excellent cost control delivering substantial upside surprise. FY18 EPS guidance was also well above consensus with management pointing to a low effective tax rate of 21.0-22.5% and ongoing margin expansion. Incorporating these factors into our numbers, we have increased our FY18 and FY19 estimates by 21% and now forecast adj. EPS of $8.77, above the guidance range of $8.45-8.60. While market volatility is likely to increase, potentially creating greater quarterly revenue volatility in 2018, we are impressed by the ongoing productivity improvements in all divisions and believe that this will continue to drive earnings growth in 2018. We reiterate our Overweight recommendation with a raised price target of $210.S&P Global is a provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. The company's segments include: S&P Global Ratings, which provides credit ratings, research and analytics; S&P Global Market Intelligence, which provides multi-asset-class data, research and analytical capabilities that integrate cross-asset analytics and desktop services; S&P Global Platts, which provides information and benchmark prices for the commodity and energy markets; and S&P Dow Jones Indices, which provides a variety of valuation and index benchmarks for investment advisors, wealth managers and institutional investors.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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