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Is a Beat in the Cards for S&P Global (SPGI) in Q2 Earnings?

Zacks Equity Research

S&P Global Inc. SPGI is scheduled to release second-quarter 2019 results on Aug 1, before market open.

Strength across segments, lower tax rate and lower share count are likely to boost S&P Global's results.

So far this year, shares of S&P Global have gained 43.8%, outperforming 38.4% rise of the industry it belongs to and 19.3% rise of the Zacks S&P 500 composite.

 

Let’s check out the expectations in detail.

Strength Across Segments to Drive the Top Line

S&P Global’s top line should benefit from strength across S&P Global Market Intelligence ("Market Intelligence"), S&P Global Platts ("Platts") and S&P Dow Jones Indices ("Indices") segments, partially offset by a decline in S&P Global Ratings (“Ratings”) segment. The Zacks Consensus Estimate for second-quarter 2019 revenues is pegged at $1.64 billion, indicating growth of 1.6% from the year-ago reported figure. In first-quarter 2019, total revenues of $1.54 billion decreased 3.3% year over year.

Going by segments, Market Intelligence revenues are expected to be driven by growth in Desktop, Data Management Solutions, and Credit Risk Solutions. Platts revenues should benefit from both core subscription business and Global Trading Services. Indices revenues are likely to be driven by gain in asset-linked fees and increase in data & custom subscriptions, partially offset by decline in exchange-traded derivative fees.

Ratings revenues are expected to be hurt by decline in global bond issuance.

Bottom Line to Improve Year Over Year

S&P Global’s bottom line should benefit from lower tax rate and share count.The Zacks Consensus Estimate for earnings per share is pegged at $2.25, indicating growth of 3.7% from the year-ago period reported figure. In first-quarter 2019, adjusted earnings of $2.11 per share increased 5% year over year.

Our Model Suggests a Beat

Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if the companies are witnessing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

S&P Global has a Zacks Rank #2 and an Earnings ESP of +0.94%, a combination that increases the odds of an earnings beat.

S&P Global Inc. Price and EPS Surprise

 

S&P Global Inc. Price and EPS Surprise

S&P Global Inc. price-eps-surprise | S&P Global Inc. Quote

Other Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may also consider as our model shows that these have the right combination of elements to beat on second-quarter 2019 earnings:

Clean Harbors CLH has an Earnings ESP of +3.23% and a Zacks Rank #3. The company is slated to report results on Jul 31. You can see the complete list of today’s Zacks #1 Rank stocks here.

Green Dot GDOT has an Earnings ESP of +0.89% and a Zacks Rank #3. The company is slated to release results on Aug 7.

Verisk VRSK has an Earnings ESP of +0.10% and a Zacks Rank #3.  The company is slated to report results on Jul 30.

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S&P Global Inc. (SPGI) : Free Stock Analysis Report
 
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report
 
Green Dot Corporation (GDOT) : Free Stock Analysis Report
 
Clean Harbors, Inc. (CLH) : Free Stock Analysis Report
 
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