INFO - Embedded Expectations Analysis - 2018 11 02
IHS Markit Ltd. (INFO:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 20.9x Uniform P/E. However, even at these levels, the market has bearish expectations, and management has concerns about their ability to delever, improve their resources segment, and maintain growth in their software offeringsSpecifically, management appears to lack confidence in their ability improve their leverage ratio and to delever below 3x by Q3 2019. Additionally, they may lack confidence in their ability to maintain free cash flow expansion rates, and may be concerned about the pace of their share repurchasing strategy. Moreover, they may be concerned about weakening EBITDA in their resources segment, and may lack confidence in their ability to expand their margins in the segment. They may also lack confidence in their ability to sustain their elevated ACV levels, and to maintain strong transportation and financial services performance. Furthermore, they appear to be exaggerating the restrictions of their competitors' portfolio mix, and may lack confidence in their ability to maintain year-over-year growth within their software offerings. Lastly, they may be exaggerating their commitment to improve their Capex spending in 2019, and reinvest I n data analytics
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