S&P Global's 16% Drop: A Flow Analysis of Guidance vs. Reality

S&P Global shares plunged about 12% on Tuesday, February 10, 2026, as the market digested its earnings release. The sell-off was triggered not by the quarterly results, but by a stark miss on forward guidance. The company's adjusted EPS forecast for 2026, $19.40 to $19.65, came in below the analyst consensus of $19.96.

That guidance gap was the decisive factor, completely overshadowing a solid Q4 performance. The quarter's adjusted EPS of $4.30 and revenue of $3.92 billion both narrowly beat expectations. Yet the market's reaction was immediate and severe, with shares down 18% in premarket trading on the news.

The setup for the drop was clear: investors had priced in higher growth, and the company's own projection for organic constant currency revenue growth of 6.0% to 8.0% for 2026 failed to meet those elevated expectations. This guidance miss, amid broader fears of AI-driven industry disruption, was enough to trigger a sharp repricing of the stock.

Decoding the Guidance: Where Growth Stalls

The 2026 outlook reveals a clear deceleration, with growth slowing across multiple segments. The most pronounced weakness is in the Ratings unit, where management guided for organic constant currency growth of 4–7 percent. Analysts labeled this range "weak," indicating it falls short of market hopes for a strong year in issuance and ratings activity. This is the primary flow constraint driving investor concern.

The broader 2026 forecast confirms a slowdown. The company expects full-year organic constant currency revenue growth of 6.0% to 8.0%. This range sits below the prior strategic targets for three of its four retained operating units, signaling a material pullback in growth momentum. The contrast with the strong 9% revenue growth seen in the just-completed fourth quarter is stark, suggesting the market is pricing in a significant deceleration.

This guidance miss is the core of the problem. The company's own projection for 2026 is now below the consensus EPS estimate of $19.96, and the revenue growth targets are beneath its previously stated medium-term benchmarks. The flow data shows a clear stall, with the market reacting sharply to the realization that the high-growth trajectory of recent quarters is not sustainable into the new year.

The AI Headwind and Cash Flow Reality

The immediate trigger for the sell-off was the guidance miss, but the underlying fear is a structural industry shift. The market is pricing in the risk that rapid advancements in artificial intelligence may be reshaping the software and services industry, a core part of S&P's analytics business. This headwind was already reflected in the stock's 15% year-to-date decline before the earnings drop, showing pre-existing concerns about growth sustainability.

Management's commitment to shareholder returns provides a floor, but it operates within a constrained flow. The company maintained its target of returning at least 85% of adjusted free cash flow to shareholders in 2026. This pledge is a positive signal, but it assumes the company can generate sufficient cash despite the growth deceleration. The real test is whether the projected 6-8% revenue growth can support the cash flow needed to meet that payout target.

The bottom line is a tension between a weakening growth trajectory and a strong capital return policy. While the 85% payout target aims to preserve shareholder value, the market is reacting to the stall in growth momentum. The AI disruption fears amplify this, making investors question the durability of the cash flows that underpin the buyback and dividend program.

Catalysts and Risks: What to Watch

The market's immediate reaction was a sell-off, but the real test begins with the upcoming first-quarter results. That report will show whether the company can execute on its 6.0% to 8.0% organic constant currency revenue growth guide for the full year. Any stumble in Q1 would validate the current pessimism and likely pressure the stock further.

A key flow metric to monitor is issuance volume within the Ratings segment. The guidance for 4–7 percent organic constant currency growth in that unit is already labeled "weak" by analysts. If early Q1 data shows sluggish issuance, it would confirm the guidance weakness is structural, not a temporary blip, and intensify concerns about the broader growth stall.

Finally, watch management's stance on the capital return policy. The company maintained its target of returning at least 85% of adjusted free cash flow to shareholders. Any adjustment to that pledge, or a shift in tone during the earnings call, would signal a loss of confidence in the cash flow needed to support it. The stock's reaction to that call will be the clearest signal of whether the current flow constraints are temporary or a new, lower-growth reality.