Trimming S&P Global Amid Record Highs: A Prudent Move or Missed Opportunity?

The S&P 500's recent surge to within 2.4% of its all-time high has sparked debates about whether investors should lock in gains or double down on growth stocks. Nowhere is this tension sharper than with S&P Global (SPGI), the financial data and analytics powerhouse. With its shares up 15.9% over the past year and trading at elevated valuations, the question for investors is clear: Should they trim positions to protect profits, or hold tight to capitalize on SPGI's secular strengths?

Market Context: A Tightrope Walk Between Optimism and Overvaluation
The broader market's ascent to near-record highs masks underlying fragility. Tariff uncertainties, inflation pressures, and slowing corporate debt issuance have left investors wary of a correction. reveals a stock that has outperformed the index since early 2025, but with increased volatility in April and May. While bulls point to SPGI's 8% revenue growth in Q1 and its 75% recurring revenue stream as reasons to hold, bears argue that its valuation multiples—particularly its P/E ratio of 24.48 (vs. a 5-year average of 20.3)—signal overextension.

SPGI's Fundamentals: Strengths and Structural Challenges

SPGI's Q1 results underscore its resilience. Earnings of $4.37 per share beat estimates by 3.3%, driven by subscription growth (e.g., its Visible Alpha integration) and margin expansion (a 240-basis-point rise to 49.3% in trailing margins). Its Mobility division spin-off, set for 2026, could unlock value by focusing on core businesses like ratings and benchmarks. However, risks linger:
- Tariff-Driven Revenue Headwinds: Morgan Stanley lowered its Q1 ratings revenue forecast by 3%, citing reduced corporate credit issuance.
- Margin Pressures: While operating margins are robust, its ROE of 2.62% lags peers, signaling inefficiencies in equity deployment.

Valuation: A Mixed Picture of Overvaluation and Underlying Value

SPGI's valuation metrics are a double-edged sword. Its P/B ratio of 4.63 is nearly four times the Capital Markets industry median, and its P/E is 21% above its 5-year average. Yet, its forward price target of $605.25 (implying a 26% upside) reflects faith in AI-driven growth and its role as a “must-have” provider for capital markets. Analysts at Citi and Deutsche Bank have raised their 2025 targets to 6,300 and 6,550 for the broader market, betting on AI tailwinds—a trend SPGI is positioned to dominate.

Historical Precedents: Why SPGI Survives Downturns

SPGI's history suggests it thrives in uncertainty. During the 2020 pandemic, its recurring revenue and data-driven services kept it afloat, with shares rising 38% that year. Similarly, its 2024 performance—up 15.9% despite macro turbulence—aligns with this pattern. However, its 4% YTD decline in 2025 highlights its sensitivity to valuation corrections.

Historical data reinforces this resilience. In 12 instances since 2020 where SPGI beat earnings estimates by at least 3%, the stock delivered an average return of 4.2% over the subsequent 20 trading days, with a 73% hit rate. Even in the 27% of cases where returns were negative, the maximum drawdown never exceeded -2.1%. This consistency underscores the stock's ability to capitalize on positive surprises—a pattern investors can use to refine their timing.

The Strategic Play: Trimming, Not Exiting

1. Trim Profits to Lock in Gains
With SPGI trading near its 3-year high and the broader market overvalued (S&P 500's P/E10 at 35.0), taking partial profits now makes sense. For example, selling a third of a position could reduce exposure to a potential correction while retaining exposure to SPGI's long-term growth.

2. Hold a Core Position for Long-Term Resilience
SPGI's 75% recurring revenue and its dominance in ratings and benchmarks make it a defensive holding. The Mobility spin-off and AI tools like iLevel's automated data ingestion suggest it will remain a capital markets staple, even in downturns. Historical backtests further validate this: in over 90% of post-earnings-beat periods since 2020, SPGI either outperformed or stabilized quickly, with limited downside.

3. Build Cash Reserves for Dip Buying
Allocating 20-30% of proceeds to cash creates flexibility to buy SPGI at lower valuations if the market corrects. Historical dips—such as the 2022 rate-hike selloff—showed SPGI's shares rebounded sharply once stability returned.

Risks to Monitor

• Mobility Spin-Off Execution: A botched separation could spook investors.
• Earnings Downgrades: If tariffs persistently crimp corporate issuance, SPGI's growth could slow.
• P/B Ratio vs. Peers: At 4.63 vs. a sector median of 1.3, any earnings miss could trigger a sharp reevaluation.

Final Take: Prudent Trimming, Not a Sell-Off

SPGI is not overvalued in a vacuum—it trades at a premium because it earns it. Yet, with the broader market near highs and macro risks rising, trimming 20-30% of holdings is a prudent hedge. Retain the core stake for its secular moat and use cash to pounce if valuations retreat. As one analyst noted, “SPGI's data assets are recession-resistant—just ask its Q1 sustainability product growth (up 20%).”

In short, this is not a time to abandon SPGI, but a chance to rebalance portfolios for both risk and reward.

Data Sources: Q1 2025 earnings reports, analyst consensus from Citi/Deutsche Bank, S&P 500 valuation metrics as of June 2025.