S&P Global's Guidance Reset: What's Priced In vs. What's Next

The market's verdict on S&P Global's latest report was clear: the strong quarter was already priced in, but the forward view reset expectations lower. The company delivered a solid Q4 revenue growth of 9% and an adjusted EPS beat of 14%, rising to $4.30. Yet, the stock fell roughly 6% to about $418 in early trading after the release. This classic "sell the news" reaction highlights where the focus truly lies-not on past performance, but on what's next.

The expectation gap is defined by the 2026 guidance. Management set an adjusted EPS range of $19.40 to $19.65, which sits about 2% below the Street consensus of $19.96. For a company trading at a forward P/E near 23x, that guidance miss is a tangible reset. It signals that the market's high bar for continued double-digit growth may have been too optimistic, especially given the company's own assumptions for a 6.0%-8.0% organic revenue growth in the coming year.

The disconnect is stark. The Q4 beat showed execution is on track, with all divisions contributing and margins expanding. But the guidance reset suggests management sees headwinds-perhaps in the bond market or from sanctions-that it believes will temper the pace of expansion. In the game of expectations, a strong quarter is just the setup. When the forward view disappoints, the stock pays the price.

Context: The SaaS/Data Spending Slowdown

S&P Global's guidance reset doesn't exist in a vacuum. It's a direct response to a broader market trend that is pressuring growth expectations across the data and software landscape. The enterprise SaaS sector, a key peer group for S&P's data and analytics businesses, is showing clear signs of deceleration. Just a few years ago, the sector was growing at a vibrant 21% annual rate. By 2024, that growth had sunk to just 12%, with the largest firms seeing their revenue expansion fall to a mere 10%.

This slowdown is the new reality. The first quarter of this year brought no relief, with SaaS revenue actually contracting by 2%. While some of this may be seasonal budgeting, it underscores a shift where companies are tightening belts and prioritizing profitable growth over pure expansion. For S&P Global, which derives significant revenue from subscription-based data products, this sector-wide cooling is a direct headwind. It pressures the growth assumptions baked into its own forward view.

The company's own 2026 guidance targets a 6.0%-8.0% organic constant-currency revenue growth. That's a meaningful deceleration from its 9% Q4 pace and the 12% full-year 2025 growth it just delivered. In this context, the guidance isn't just a conservative forecast-it's a strategic acknowledgment of the slower spending environment. Management is resetting expectations to align with a market where even its strongest peers are seeing their growth rates halve.

The lowered 2026 guidance is a selective reset. It doesn't reflect a broad slowdown but a strategic recalibration of which growth drivers are being tempered and which are being preserved. The market is now pricing in a more measured expansion, acknowledging that even S&P Global's strongest segments cannot sustain their recent blistering pace.

The most striking deceleration is in the company's flagship divisions. Both Ratings and S&P Dow Jones Indices delivered exceptional performance in 2025, with 12% and 14% revenue growth respectively. Yet, the 2026 outlook assumes a significant slowdown for both. The guidance targets a 4%-7% organic growth range for Ratings and a 10%-12% range for Indices. That's a meaningful step down from the 2025 momentum, signaling management sees headwinds-likely in bond issuance volumes and equity market appreciation-that will temper the pace of expansion. The expectation gap here is clear: the market had priced in continued double-digit growth from these engines, but the forward view suggests a more modest trajectory.

At the same time, the guidance confirms a positive strategic move that is not reflected in near-term growth targets. Management reiterated its plan to spin off the Mobility business, with a public filing and investor day expected in the second quarter. This is a clean, value-creating step that allows S&P Global to focus on its core data and analytics franchises. However, the 2026 revenue growth guidance of 6.0%-8.0% and the EPS target of $19.40-$19.65 are set assuming the business operates as a single entity through the spin. The strategic benefit is priced in over the longer term, not in the near-term numbers.

This brings us to the central question: is the 9-10% EPS growth target too conservative? On one hand, the guidance assumes only modest margin expansion and faces a 60-basis-point headwind from sanctions in Energy. On the other, the company has demonstrated exceptional execution, with 14% EPS growth in 2025 and a strong Q4 showing 60 basis points of margin expansion. The company is also integrating AI at a "leap forward" pace, which could drive future efficiency gains. The guidance reset may be prudent, but it leaves little room for upside surprises. For now, the market is pricing in a steady, not spectacular, climb.

Valuation and the Forward Expectation Gap

The market's verdict on S&P Global's guidance is now fully priced in. The stock's forward P/E of just under 23x represents a steep discount from its trailing multiple of approximately 32.3x. This valuation gap is the clearest signal that investors have reset their expectations for growth. The strong Q4 performance was the setup; the guidance reset is the new reality, and the market has already paid for it.

The company's capital allocation discipline, however, provides a counterweight to the lower growth trajectory. In 2025, S&P Global returned a massive 113% of adjusted free cash flow to shareholders, including over $5 billion in share repurchases. This relentless focus on returning capital is a powerful support for the stock, especially in a slower-growth environment. It means the company is not just guiding down but also actively reducing its share count, which can help support earnings per share even if top-line growth moderates. This discipline is a tangible benefit that the market is likely factoring in, even as it prices in a more modest growth path.

The primary risk that validates this cautious forward view is the broader slowdown in the SaaS and data sector. The enterprise SaaS sector's revenue growth has halved from a peak of 21% to just 10% in 2024, with the first quarter of this year showing a contraction. For S&P Global, whose data and analytics segments are subscription-driven, this is a direct headwind. The company's own 2026 guidance assumes only 6.0%-8.0% organic revenue growth, a significant deceleration from its recent pace. The market is pricing in this sector-wide cooling, acknowledging that even S&P Global's execution cannot entirely insulate it from a broader spending slowdown.

The bottom line is that the valuation gap reflects a clean expectation reset. The stock is no longer priced for double-digit growth; it is priced for the new, lower trajectory. The strong capital returns provide a floor, but the forward P/E suggests investors are demanding a discount for the slower expansion. The disconnect isn't in the price-it's in the growth assumptions that were once priced in. The guidance reset has closed that gap.

Catalysts and Risks: What to Watch

The market has reset its expectations. Now, the focus shifts to the near-term events that will prove whether this new, lower trajectory is justified. Three key catalysts will determine if the stock can stabilize or if further disappointment lies ahead.

First, the company must deliver against its own guidance. The 2026 outlook targets 6.0%-8.0% organic constant-currency revenue growth. The first quarter will be the first real test. Investors will scrutinize whether S&P Global can meet this range, which is a significant deceleration from its 9% Q4 pace. A beat here would signal that the guidance was appropriately conservative, while a miss would validate the market's cautious stance and likely pressure the stock further. Execution on this growth target is the baseline for the new setup.

Second, the planned spin of the Mobility business is a major value unlock that must now be watched. Management confirmed the plan, with a public filing and investor day expected in the second quarter. This is more than just a corporate reorganization; it's a strategic move to focus on higher-margin data and analytics. The key watchpoint is the potential debt offering that could follow. A successful spin and capital structure optimization would demonstrate management's ability to create shareholder value, providing a tangible positive catalyst that could offset the slower organic growth.

Finally, the company must show it can navigate the broader sector slowdown. The enterprise SaaS sector's growth has halved, and S&P Global's own guidance assumes only modest margin expansion. The critical question is whether its strategic initiatives can generate offsetting growth. Watch for updates on AI integration progress and the performance of its private markets segment, which grew 16% last year. If these areas can demonstrate acceleration, they could help S&P Global outperform its peers and the broader market, proving that execution can partially insulate it from macro headwinds. The market is now pricing in a slower world; the company must show it can still grow within it.