DCF Studio

    SPGI · NYQ · Financial Services

    S&P Global Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 234.02

    Market price

    USD 405.32

    Implied upside

    -42.3%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.

    Value Per Share

    Perpetuity growth
    USD 234.02-42.3%
    Exit multiple
    USD 471.24+16.3%
    Market price
    USD 405.32

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn4bn8bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 17.0bnUSD 18.9bnUSD 21.0bnUSD 23.4bnUSD 26.0bn+11.1%
    EBITUSD 5.9bnUSD 6.5bnUSD 7.3bnUSD 8.1bnUSD 9.0bn+11.1%
    NOPATUSD 4.7bnUSD 5.2bnUSD 5.7bnUSD 6.4bnUSD 7.1bn+11.1%
    Add depreciation & amortisationUSD 1.5bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.2bn+11.1%
    Less capital expenditureUSD -174.0mUSD -193.3mUSD -214.8mUSD -238.7mUSD -265.2m+11.1%
    Less increase in working capitalUSD -595.4mUSD -661.6mUSD -735.1mUSD -816.7mUSD -907.4m+11.1%
    Free cashflow to firmUSD 5.3bnUSD 5.9bnUSD 6.6bnUSD 7.3bnUSD 8.1bn+11.1%
    Discount factor0.95310.86580.78650.71440.6490-
    Present valueUSD 5.1bnUSD 5.1bnUSD 5.2bnUSD 5.2bnUSD 5.3bn+0.9%
    Present Value Of The ForecastUSD 25.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.052Reported 1.077, pulled toward 1.0 (Blume)
    Cost of equity10.78%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 119.5bn89.8% of capital
    Total debtUSD 13.6bn10.2% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC10.08%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 234.02

    69% of EV

    Forecast FCFF, final year
    USD 8.1bn
    Capex at depreciation, working capital in reinvestment
    USD 8.7bn
    Less reinvestment at g/ROIC (24.8% of NOPAT)
    USD -2.2bn
    Capitalised
    USD 6.5bn
    ROIC (WACC floor)
    10.1%
    Terminal value, undiscounted
    USD 88.2bn
    Terminal value, discounted
    USD 57.3bn
    Enterprise value
    USD 83.2bn
    Less net debt
    USD 11.8bn
    Equity value
    USD 71.4bn

    Exit at 17.8x EBITDA

    Value per shareUSD 471.24

    83% of EV

    Terminal value, undiscounted
    USD 199.8bn
    Terminal value, discounted
    USD 129.6bn
    Enterprise value
    USD 155.6bn
    Less net debt
    USD 11.8bn
    Equity value
    USD 143.8bn

    Spread between methods: 67%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.08%304.06306.16308.43310.90313.65
    9.08%263.28264.33265.39266.45267.51
    10.08%232.19233.10234.02234.93235.85
    11.08%206.77207.57208.37209.17209.97
    12.08%185.62186.32187.03187.73188.44

    Outlined: this model. Green text: above today's price of 405.32. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year11.1%24.8%+13.7pp
    EBIT margin34.6%60.6%+26.0pp
    Discount rate10.1%6.8%-3.3pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.