S&P Global is a phenomenal business and still one of the highest-quality picks in public markets — without a doubt. It is a pure-play financial intelligence powerhouse collecting a toll on nearly every bond issued, every trade benchmarked, and every portfolio measured against an index. And it does all of that with an unmatched moat, practically unthreatened at its core.For perspective, its Ratings segment operates an unchallenged duopoly alongside Moody’s, capturing a fee virtually every time a company or government raises debt, with no investor buying debt without a credit rating from S&P. This truly is a toll-booth business in the purest sense, and an irreplaceable one. Meanwhile, through the Indices segment, home to S&P Dow Jones Indices, it gets paid on assets benchmarked or tracked against products like the S&P 500. Simply put, as more funds flow to passive investing and S&P benchmarks, S&P Global earns more money at near-zero incremental cost. That’s a beauty of a business.Ultimately, both Ratings and Indices are deeply entrenched and virtually irreplaceable, protected by moats few businesses anywhere can match. Literally, these allow S&P Global to earn a royalty on the financial ecosystem – debt issued and assets flowing into passive investments.On top of that sits Market Intelligence, bringing in a chunk of subscription-based revenue. Entire investment workflows across the industry have been standardized around S&P’s software, like Capital IQ, backed by unmatched proprietary data. And then there’s Energy, primarily Platts, which serves as the reference point the commodity world prices against. When traders, producers, and buyers need a benchmark for energy, metals, or agriculture, S&P’s numbers are the ones everyone defaults to, having become the irreplaceable standard globally.Really, it’s hard to find another company with this many structurally entrenched, high-margin businesses sitting under one roof.Yet, we can safely say it has been out of favor with investors, with S&P Global seen as an AI victim, specifically its data offerings and workflow and analytics products within the Market Intelligence segment. The core anxiety is straightforward: if AI can synthesize financial data, generate credit analysis, and answer complex questions about markets and companies in seconds, why would professional investors pay thousands of dollars per year for a Capital IQ subscription?Yet, as argued in my S&P Global deep dive back in March, I think the market is viewing and pricing this completely backward. Don’t get me wrong: the threat is real, and S&P will see AI pose a headwind to its analytics/software business in the long run. Yet the market is pricing S&P as if the entire business is threatened, significantly overestimating the share of profits susceptible to AI disruption, with core data products and Ratings, Indices, and Energy operations largely isolated.In other words, I deem these concerns extremely overblown. Yet, it has sent S&P Global shares down 24% over the past year and near multiples we most recently saw during the March 2020 COVID sell-off, a steep discount to the premium valuation this business has commanded for most of its public life. This disconnect between the overblown narrative the market is pricing in and the business’s actual fundamentals creates a compelling setup, as I argued back in March.For a full breakdown of S&P Global, check out my March 2026 Deep Dive!However, a lot has happened since my last real look at this business. In late July, S&P Global released its second-quarter results, delivering unspectacular headline numbers, but strong operational momentum under the hood. Then last week, super investor Bill Ackman added S&P Global to his portfolio, citing the same thesis I laid out back in March. Finally, S&P completed the spin-off of its Mobility segment last quarter, creating a much more streamlined business focused on its highest-value operations.Given these developments and with shares essentially flat since my Deep Dive in late March, I see plenty of reason to take a renewed look at this business and update my thesis. Today, I will break down S&P’s Q2 results, re-address the AI threat in detail, and update the long-term outlook and my own financial model.I didn’t add S&P to my portfolio back in March, despite my bullish take. Is now the right time to pick up some shares?Let’s delve in!Welcome to InvestInsights — an independent equity research publication rooted in long-term, buy-and-hold investing, publishing actionable stock/equity research reports weekly!📈 You’re reading my latest [FREE] stock analysis. If you like this analysis, make sure to like & subscribe to receive much more like this, weekly!Subscribe nowFinancial & Performance ReviewOn July 28, S&P Global ($SPGI) released its second-quarter results, which marginally surpassed the Wall Street consensus and exceeded my own expectations, driven by a very strong performance in Ratings and Indices that more than offset a weaker performance in Market Intelligence and Energy, both facing near-term external headwinds. Crucially, underlying operating conditions for S&P remain favorable, with secular drivers unabated, the global economy still strong despite geopolitical tension, notably strong debt issuance, and record net inflows into S&P ETFs.Breaking down the Q2 results, S&P reported GAAP quarterly revenue of $4.2 billion, up 10% YoY and beating the consensus by $30 million, showing momentum in line with Q1. However, more importantly, pro forma revenue, which excludes the spun-off Mobility segment and better reflects the remaining core business, was up 11% YoY both organically and reported to $3.7 billion, ahead of management’s expectations. This reflects strong momentum, accelerating 1 point from Q1 to the strongest growth in 1.5 years, although that isn’t apples-to-apples given the Mobility business was historically slower growing.Nonetheless, I was really pleased with this strong momentum in the core business, coming in ahead of expectations and going against the disruption narrative. S&P rarely delivers flashy numbers, but it has proven to be a steady compounder consistently outperforming expectations, and Q2 was no different.And coming off an outlook cut in Q1, this outperformance was a welcome confidence booster.Breaking things down by segment, let’s start with Indices, which delivered an excellent quarter. Revenue hit a record high for a 13th straight quarter, growing an impressive 20% in Q2, a further 3-point acceleration from Q1 and the strongest growth rate for Indices in over three years, despite lapping 15% growth last year – quite sensational momentum.This growth was driven by a strong performance in both asset-linked fees and exchange-traded derivatives. For reference, asset-linked fees are by far the most exciting piece here. These are licensing fees charged to ETF and mutual fund managers as a percentage of the assets benchmarked to S&P indices. For example, S&P gets $600,000 per year plus 0.03% of assets under management from ETFs like SPY.The beautiful thing about this model is that S&P directly benefits from rising equity markets (which increases AUM), growing passive investing (which increases the number of products benchmarked to its indices), and the proliferation of derivatives on its indices (the exchange-traded options and futures market for the S&P 500 is enormous). All three secular trends are working in its favor simultaneously, driving very strong growth. And these secular trends require near-zero investment from S&P, so this is incremental revenue at near-zero cost, given the reputation of S&P Dow Jones indices. Take the fact that the U.S. Treasury selected 4 S&P Dow Jones Indices for the Trump Accounts out of a total of five – a perfect proof point.In Q2, revenue from asset-linked fees grew 22% YoY, driven by equity market appreciation (since S&P takes a percentage of the value) and strong net inflows of $600 billion, a quarterly record that cements it as the #1 index provider. ETF AUM for S&P Dow Jones Indices ended the quarter at $6.35 trillion, which does not even include mutual funds, OTC derivatives, and insurance products, which brings it closer to $20 trillion. In addition, S&P generates revenue from exchange-traded derivatives. For reference, this revenue comes from royalties generated on trading volumes of derivative contracts listed on global exchanges. The S&P 500 options market has over a trillion dollars traded daily in linked exposures across futures, options, and structured products. Every time a contract changes hands, S&P collects a small royalty. In Q2, exchange-traded derivatives revenue also grew 22% YoY, driven by strong volumes, particularly in SPX.Clearly, current market conditions are very much working in S&P’s favor, with strong option volumes in a volatile market and record inflows as activity remains strong.Ultimately, this segment might be just 14% of group revenue, but it is a sublime, high-margin royalty business on a growing asset base of over $20 trillion. I am impressed by the current performance, which is well ahead of my expectations, and I continue to adore this piece of the business. Moreover, I expect this momentum to persist and remain ahead of target, given these favorable market conditions on top of the secular drivers.Next up is the Ratings segment, now the largest by revenue at 35%, which delivered a similarly impressive performance. This is where S&P operates an effective duopoly alongside Moody’s. Practically, its job is to provide independent opinions on the creditworthiness of debt issuers, including corporations, governments, financial institutions, and structured finance vehicles. S&P and Moody’s rate over 95% of U.S. corporate debt because most debt issuances must be rated by at least two agencies before investors consider buying them, and after a century of regulatory entrenchment and brand-building, S&P and Moody’s are the practical default investors look to, making it a duopoly as unchallenged as they come.For Q2, S&P reported record revenue of $1.34 billion, well exceeding expectations and up 17% YoY, a 4-point acceleration from Q1 and the strongest growth since late 2024, although it does lap a relatively weak quarter last year related to tariff concerns.For perspective, S&P breaks Ratings revenue up into non-transaction revenue and transaction revenue. Non-transaction revenue primarily comprises credit-rating surveillance, annual fees for customer relationship-based pricing programs, fees for entity credit ratings, and global research. This is the stickier, more predictable stream. Practically, once SPGI rates an entity, that entity continues paying annual surveillance fees as long as it has outstanding rated debt.Transaction revenue primarily relates to ratings of publicly issued debt and bank loans. This cyclical, volume-dependent piece rises and falls with debt issuance activity. When interest rates fall and borrowers rush to refinance, this line booms. When rates are high and issuance slows, it contracts.In Q2, non-transaction revenue grew steadily at 8%, driven by higher annual fee revenue and strong growth in evaluation services. Given its nature, this revenue tends to grow steadily in the high single digits, so no real surprises there.The more exciting piece is transaction revenue, which grew 25% in Q2, driven by strong issuance and helped by a relatively low level last year. According to management, the market appears to be pricing in slightly higher rates than expected, though credit spreads remain tight, creating favorable issuance conditions. In particular, investment-grade debt was a key driver, with high-20s growth driven by tech infrastructure and hyperscaler issuance and M&A transactions. Meanwhile, bank loans, high-yield, and structured finance were also up double digits, and private markets revenue grew 60% YoY, although from a small base.Regarding hyperscaler issuance, momentum slowed as Q2 progressed, as expected, but remains strong overall and still came in well ahead of initial expectations. Simply, as hyperscaler CapEx budgets keep growing, they need to issue more debt, and they need S&P to rate it, driving strong transaction revenue growth. In H1, this totaled $169 billion in issuance from hyperscalers alone, compared to a full-year outlook of $200 billion, so clearly trending well ahead. Therefore, management now expects $250 billion to $300 billion in hyperscaler issuance for the full year and double-digit growth in M&A-related issuance, which is a very strong backdrop for its Ratings business. I expect this will remain a tailwind over the next several years.On top of that, substantial refinancing walls of COVID-era debt are due in 2027 and 2028, along with global infrastructure needs. Crucially, despite outperformance so far in 2026, management does not see it coming at the expense of future refinancing activity, still projecting $11 trillion in rated debt to come up for refinancing over the next 4.5 years.This segment is firing on all cylinders, and the outlook remains very strong.Third up is the Energy segment, which now accounts for 18% of revenue. This is likely less familiar to some, but it offers price assessments, benchmarks, and analysis for energy, metals, agriculture, and other commodity markets. This information helps producers, traders, and buyers make informed decisions in volatile markets. The flagship brand is Platts, which has set benchmark prices for oil, gas, and other commodities for over a century. Platts’ price assessments are embedded directly into physical commodity contracts. When a tanker of crude oil changes hands, the price is often referenced against a Platts benchmark. That is an almost unassailable position.In Q2, Energy revenue was up just 3% YoY, reflecting a challenging operating environment amid sanctions, tariffs, and uncertainty in the Middle East, which drove volatility and uncertainty during the quarter. This weighed on subscription renewals, one-time sales, and GTS (Global Trading Services).Breaking this down further, S&P breaks down Energy into two business lines. First is the Platts benchmark business, which includes price assessments, global trading services, and other offerings associated with the Energy and Commodity benchmarks. Platts revenue rose 4% YoY in Q2, driven by strong performance in price assessments amid a resilient benchmark business, offset by weakness in GTS.GTS is essentially a platform for facilitating and settling physical and financial commodity trades. Where Platts’ core business is informational (publishing price assessments the market references), GTS is more transactional, tied to actual trading activity and volumes in energy and commodity markets. While high price volatility is usually positive for GTS, the level we saw in Q2 amid the Middle East conflict dampened market activity.The second part of the Energy business is CERA, which includes proprietary data, content, research, and events, including the holistic supply chain suite that previously spanned Energy and Market Intelligence. CERA revenue was up 1% YoY in Q2, driven by market insights and analytics, largely offset by declines in upstream and conference and training revenue, also dragged down by the Middle East Conflict.Crucially, across both Platts and CERA, the current headwinds are temporary and do not affect the long-term outlook for the Energy business. Therefore, management reaffirmed its 6-8% average growth outlined during the Investor Day.Ultimately, the Q2 Energy performance was far from impressive, with growth decelerating sharply to the low single digits, yet under normalized conditions, this segment has delivered at least high-single-digit growth and remains the gold standard in commodity benchmarking. I remain very bullish.Finally, let’s address the performance in Market Intelligence, now 33% of group revenue, as well as the lingering AI threat.Ultimately, the segment is best understood as a collection of data platforms, workflow tools, and analytics products serving different professional audiences within the financial services industry, with Capital IQ Pro as the flagship platform. 85% of Market Intelligence revenue is subscription-based, with multi-year contracts and high switching costs due to deep operational integration, as proven by a 94% retention rate.In Q2, revenue here grew 6% YoY, a 2-point slowdown from Q1, but broadly in line with the growth rate this segment has delivered over the last 3.5 years, consistently in the 5-8% range. This was driven by growth across the subscription franchises and some benefit from the upfront revenue from a 10-year renewal closed in the quarter. It also continues to benefit from ongoing vendor consolidation, momentum in key strategic areas (such as AI solutions and Kensho LLM-ready APIs), and improving capital markets activity, though this is currently offset by softness in some pockets of Market Intelligence and longer renewal cycles.Management also saw an uptick in retention rates, which is promising and runs directly counter to the dominant AI disruption narrative.Delving deeper, again, S&P breaks up the Market Intelligence segment into two business lines. First, Kensho Data & Platforms includes data feeds, Kensho LLM-ready APIs, RatingsXpress, and all proprietary data, as well as Cap IQ, Consulting, Issuer Solutions, RatingsDirect, Visible Alpha, and With Intelligence. The first portion – the Kensho Data piece – is roughly half of this business line and is growing high single-digits to low double-digits, driven by more and more third-party platforms, including AI, plugging into S&P’s data. The second piece – the platforms – is the slightly larger component but is growing low single digits organically.Q2 Kensho Data & Platform revenue was up 8% YoY.The second business line is Enterprise Solutions, which includes the entire Lending Solutions suite, ClearPar, Debtdomain, Pricing and Reference Data, Notice Manager and WSO. It also includes iLEVEL, bookbuilding software for fixed income and equity origination and valuation services.The key difference between the platforms within Kensho Data & Platforms and Enterprise Solutions is that the latter are market-leading franchises that serve niche markets, often highly regulated, and depend on them to function. In other words, Enterprise Solutions aren’t optional, while Cap IQ is.Enterprise Solutions revenue was up 3% YoY in Q2, reflecting the divestiture of EDM and thinkFolio. Organically, revenue was up 10% YoY, with strong demand across the board. Given the irreplaceable position, this business line tends to be a steady compounder.With all of this in mind, let’s address the elephant in the room – the risk of AI disruption.You see, the core fear is that AI’s ability to synthesize financial data, generate credit analysis, and answer complex questions about markets and companies in seconds allows for the rapid implementation and adoption of AI Agents to automate processes that currently require software platforms like Cap IQ. In other words, the fear is AI will disintermediate these kinds of interfaces used to access and visualize data.I think that fear is entirely fair. If AI agents increasingly access and synthesize financial data directly on behalf of professionals, the human-facing interface built around that data starts to matter less — and Capital IQ, at its core, is an interface. Like any software whose value depends on humans clicking through screens, dashboards, and search bars, that value proposition weakens the moment the “user” is an AI agent that just wants the underlying data.Hence, software like Cap IQ faces significant disintermediation risk over time.The market isn’t wrong about the threat AI poses to analytical software like Cap IQ. Rather, it overestimates the portion of S&P susceptible to AI disruption while underestimating or ignoring the benefit S&P will likely see from AI adoption.For starters, the Ratings business is almost entirely immune to AI disruption. The moat here is not analytical skill; it is a regulatory designation. The reason issuers pay S&P for a credit rating is not that S&P’s analysts are better at assessing credit risk than an AI model could be. It is because regulators require ratings from NRSROs, and investment mandates specify them by name.The Indices segment is also completely unthreatened by AI. AI cannot unbenchmark the S&P 500 from trillions of dollars of ETFs, investment mandates, and derivatives contracts. The asset-linked fee stream is driven by AUM growth and equity market appreciation, neither of which is related to AI’s ability to replicate analytical work.And finally, Platts price assessments derive their value from being the trusted, legally recognized benchmark in physical commodity contracts. Again, what matters is not the methodology but the standardization and trust built up over a century. AI does not threaten this.That leaves only Market Intelligence, which is just 33% of revenue and less than a quarter of profits, and even that segment isn’t entirely susceptible to AI disruption. Really, the only part of the business under threat is the distribution layer, including platforms like Cap IQ used to access both proprietary and non-proprietary data. Yet, Cap IQ, the only significant revenue contributor, still accounts for less than 7% of group revenue and an even smaller share of profits.Meanwhile, 25% of Market Intelligence revenue comes from the previously discussed Enterprise Solutions business, which is most often protected by regulation, deeply embedded, and mission-critical in day-to-day operations. That makes it far less susceptible to AI alternatives.Additionally, 40% of Market Intelligence comes from proprietary or curated data accessed through customer workflows. For example, Tikr or Seeking Alpha licenses S&P data. This piece doesn’t care whether it’s accessed through an AI Agent or an actual person. S&P just licenses access to the data, and that won’t change with AI.If anything, given S&P uses value-based pricing, not seat-based, AI is a potential growth catalyst. High-fidelity structured data is critical for AI to work, and S&P sits on a gold mine. Every AI agent that needs to reason about credit risk, market structure, or company fundamentals still needs clean, structured, trusted data to reason over. That means the more AI adoption accelerates across the financial industry, the more valuable S&P’s underlying datasets become, not less, since agents consuming that data via API calls are just as billable as a human clicking through a dashboard. Management is already leaning into this: Kensho’s AI-ready APIs saw call volumes jump 5x quarter-over-quarter with over 500 clients now plugged in, and S&P is actively repositioning itself as the data layer other companies’ AI models are built on top of, rather than the endpoint humans stare at.In other words, the data layer is an incremental opportunity for S&P that could accelerate growth and at least partially offset any lost interface business.So, overall, only roughly 35% of Market Intelligence revenue is exposed to potential AI disintermediation, which comes down to just 12% of group revenue and sub-10% of profits. And any lost interface business is likely offset by growing demand for its Kensho Data business.So, the distribution might change, but this business isn’t getting disrupted, and any impact from AI is relatively small, making current fear-driven pressure completely overblown.On that note, let’s move to the bottom-line results.S&P reported operating expense growth of just 6% YoY, reflecting tightened spending due to the Middle East conflict and subsequent heightened volatility and macroeconomic risk. Positively, with expenses growing well below revenue, S&P delivered another quarter of healthy operating leverage.The Q2 operating margin came in at 54.3%, up 200 bps YoY on a comparable basis (excluding Energy from last year’s numbers), which is excellent. As shown below, S&P has delivered consistent margin expansion over the last 3.5 years, delivering over 800 bps of cumulative margin gains since 2023.Apart from tight cost control, strong growth in the high-margin Ratings and Indices segments, becoming a larger share of revenue, is a strong tailwind to group margins. The beauty of these business models is that growth comes at near zero cost. Once a bond is rated or an index is calculated, serving the next dollar of issuance or the next dollar of AUM benchmarked against it requires essentially no incremental headcount, infrastructure, or spend. That means nearly every extra dollar of revenue in these two segments drops straight to the bottom lineAnd this translates into remarkable segment margins that expand rapidly. The Ratings margin expanded by 310 bps in Q2 to 68.5%, driven by strong growth. Meanwhile, the Indices operating margin was up 90 bps YoY to 71.5%. Together, these segments now generate 63% of group operating profit, creating a very high-quality foundation.Additionally, the Energy margin was up 70 bps YoY to a strong 47.5%, despite slower growth, reflecting excellent cost control. And Market Intelligence delivered 120 bps of margin expansion to 36%.Ultimately, this translated to an operating profit of $2 billion, up 15% YoY.Further down the line, this resulted in EPS of $4.08, up 23% YoY, with the outperformance versus operating income growth mainly driven by a lower share count. Not only does S&P deliver healthy top-line growth and strong margin expansion, but it also buys back its own stock at a good rate, further lifting profit per share. For reference, S&P has retired over 10% of outstanding shares over the last three years alone.Finally, FCF deserves some attention. In 2025, we saw the FCF margin drop 3-points YoY despite growing operating income at a good rate, which was mainly the result of higher CapEx, investments in AI infrastructure, data, and platform build-out, and distributions to noncontrolling interest holders, both showing up as a cash flow drag and not an operating expense.Last quarter, S&P reported FCF of $1.4 billion, reflecting a 34% FCF margin but roughly flat YoY, despite strong growth in operating and net income. FCF can be a bit lumpy, so TTM FCF is a better measure of performance, and this now sits at $5.6 billion, reflecting a 35% FCF margin, which is down from 36% in 2025. Positively, we should see more of a timing benefit in H2, resulting in management guiding for a 2026 FCF margin of 37%, which is excellent.Crucially, this slight margin pressure isn’t a reflection of deteriorating profitability, with operating margins still expanding nicely; rather, it reflects a growing wedge between accounting profit and cash conversion, driven by tax timing, step-up capex tied to AI/data investment, NCI payouts scaling with Indices’ outperformance, and one-off separation costs tied to Mobility. The biggest impact to FCF this year is the timing of cash taxes, net income, and working capital, which simply means a growing share of adjusted net income isn’t converting to cash as quickly as it used to, largely a tax-timing effect rather than a change in the underlying business.All of these should be transitory, so I am not worried, but it does put some pressure on near-term FCF.In the meantime, despite some accounting headwinds, S&P still generates strong FCF, allowing it to maintain a healthy balance sheet and return ample cash to shareholders. It ended Q2 with $4.1 billion in cash and $15.7 billion in debt, leaving it with net debt of $11.6 billion, which does seem elevated. This debt largely stems from the IHS Markit merger in 2020 and aggressive buybacks in recent years.Crucially, S&P explicitly targets 2.0x-2.5x gross debt/EBITDA, with no ambition to significantly improve the balance sheet. Management is comfortable with this given the business’s predictable cash flow. Really, it is opportunistic financial engineering on top of a genuinely low-capex operating model – management is happy with current debt levels and prefers to use cash elsewhere where it generates better ROI, including buybacks.Currently, we are looking at gross leverage of 2.7-2.8x by the end of 2026, above the aforementioned target, but management foresees some natural deleveraging in 2027 as EBITDA grows.Meanwhile, management sees its shares as heavily undervalued at current prices and remains very aggressive on buybacks, raising its 2026 buyback target by nearly $3 billion to $7 billion, which allows it to retire over 5% of outstanding shares at current prices in this year alone. This is funded in part by the $2 billion dividend it received from Mobility Global upon the completion of the spin-off and some new debt issued in H2. On top of that, S&P also pays a fairly attractive dividend. Shares now yield 0.91%, which may not seem overly appealing, but this is well covered by a 20% payout ratio, and S&P is a Dividend King with 52 consecutive years of dividend growth. I would call that quite attractive.On that note, let’s move on to the valuation!More content like this? Consider InvestInsights PremiumInvestInsights Premium is designed to help you find best-in-class compounders, identify deep-value opportunities, avoid costly mistakes, and stay focused on fundamentals when markets get noisy, with full transparency into how I make decisions over time.In practice, this gets you:6–8 Research Reports per month, 2x more than free subs do, which includes 3-4 Deep Dives!Full visibility into my personal portfolio, including allocations, transactions, and conviction levelsAn overview of target prices and ratings, updated weekly, all available in a web-based Hub.Price tag? Only $95 per year or $9.50 a month. That comes to just $1 per analysis, with the rest provided at no cost.Sound useful? You can upgrade to Premium today using the button below!Subscribe nowOutlook & ValuationAs always, let’s start with management’s guidance. Following a better-than-expected result in Q2 and the completion of the Mobility spin-off, management raised its FY26 guidance for two of four segments. It now guides for organic FX-neutral revenue growth in the range of 6-8%, which is unchanged due to some offsetting items.By segment, Ratings is now expected to grow 5-8% organically in 2026, up 1 percentage point from the prior guide. Indices is forecast to grow 12-14%, up 2 points from the prior guide. Energy is unchanged at 4.5-6%, and Market Intelligence is expected to grow 5.5-7% organically, also unchanged. Given the challenging and volatile operating environment, I think management is still guiding fairly conservatively. I do see upside to these expectations.On the bottom line, management has maintained its EPS guidance in the range of $17.50 to $17.75, despite the Mobility spin-off. Mobility was a lower-margin business, so S&P is seeing its overall margins improve. Add to that a notable outperformance in the high-margin Ratings and Indices operations and a larger buyback allocation, and that combination is enough to offset the lost profits from Mobility in the second half of the year. That is really excellent!As for FCF, management expects $2.9 billion to $3.1 billion in H2 FCF, bringing the 2026 total to $5.4 billion at the midpoints. That is down from $5.5 billion in 2025, but includes the loss of the Mobility business in H2. This reflects an approximate 37% FCF margin.Looking long-term, S&P’s outlook still looks very good. Anchored in the long-term expansion of global debt markets, the refinancing wall, and the growing penetration of credit ratings in emerging markets, this industry is expected to compound steadily. Management expects this to drive a 6-9% CAGR. For Indices, ETF AUM is expected to reach $35 trillion or higher by June 2030, with the shift to passive investing still strong. In recent years, this has fueled a 13-18% CAGR, and I see ample room for this to last over the next decade. Management guides for an Indices CAGR of 10-12%, but I see room for a 12-15% CAGR, serving as a key growth engine.As for Energy, S&P Global’s own research projects that power demand for data centers will grow between 10–15% per year through 2030, representing a dramatic shift in global electricity consumption patterns, and that means entirely new commodities markets for power pricing, carbon, and clean energy that Platts is actively building coverage around. The energy transition is also creating new benchmarking needs for green hydrogen, carbon credits, and LNG, representing a significant expansion of the segment’s addressable market. Ultimately, this should allow for a 6-9% CAGR according to management, which seems reasonable.Finally, there is Market Intelligence, which is the most challenged and uncertain segment, as discussed. The underlying market is forecasted to maintain a high-single-digit to low-double-digit CAGR, but S&P has been growing slower than the market for years, and I don’t expect that to change, especially as AI adoption grows. Management itself now forecasts a 6-8% CAGR for this segment, which is reasonable, with AI pressure offset by growth in data usage.Ultimately, this leads management to guide for a revenue CAGR of 7-9% over the next 5 years, which seems realistic and potentially slightly conservative. And given the expectation for Ratings and Indices to be the primary growth drivers, I expect S&P to continue delivering strong operating leverage and expanding margins. Layer on consistent repurchases, which should at least retire 3% per annum, and we can easily get to a low-to-mid teens EPS CAGR.Really, this is a business poised for healthy compounding for decades to come, even when we account for the AI disruption of its software interface business.Jumping to my own financial forecast, I’ve had to make some large changes to my model to account for the Mobility spin-off. Reflecting the Mobility spin-off, I expect 2026 revenue to be down roughly 4% YoY, reflecting organic growth at the high end of management’s guidance. I expect Energy to face lingering headwinds throughout the year, Market Intelligence growth to remain in the mid-single digits, and Ratings and Indices to keep performing well and drive growth.On the bottom line, I expect EPS to come in just above the high end of guidance, driven by the Ratings and Indices outperformance. Finally, I expect FCF to be down 1% and come in at the midpoint of guidance at $5.4 billion, reflecting an excellent 37% FCF margin.Looking further ahead, I expect S&P’s growth profile to normalize in 2027 and consistently remain in the 7-8% range through 2029. Within this, I expect Ratings and Energy growth to normalize to the mid-to-high-single digits and Indices to keep growing ahead of expectations, while taking a conservative approach to Market Intelligence, assuming some pressure on growth as we progress. I expect much of this to be offset by strong Kensho Data demand, but I prefer to be conservative for now.Moving to the bottom line, I expect S&P to deliver strong margin expansion through 2029, fueled by Ratings and Indices outgrowing the other two business lines, driving up margins, as well as tight cost control to fuel operating leverage. Combine this with 2-4% share count reductions per annum, and I arrive at 13-16% EPS growth through 2029. Finally, I expect steady FCF margin expansion, enabling mid-teens FCF growth and a FCF margin above 40% from 2027 onward.All these assumptions are reflected in the updated financial model below!That brings me to valuation, and it’s safe to say that the fears of AI disruption have made S&P the most attractively valued in years. Shares are down 17% YTD and 22% over the past year, leaving these trading at the following multiples (based on a current price of $432):24x 2026 earnings23.5x 2026 FCFI agree, these multiples don’t look overly cheap. I mean, 24x earnings for a business growing revenue high-single digits and EPS mid-teens isn’t a standout by itself. However, given the quality, durability, and reliability it offers, I’d argue these multiples are definitely attractive. This isn’t a cyclical industrial or a hyped-up growth story trading on hope; it’s a business with structurally entrenched, high-margin franchises in Ratings, Indices, and Energy, as well as recurring subscription revenue in Market Intelligence, and 53 consecutive years of dividend growth that speak to just how resilient these cash flows have proven across multiple recessions, a financial crisis, and a pandemic.Businesses of this quality, with this kind of pricing power, these kinds of moats, and this level of predictability, have historically traded at a structural premium to the market for good reason. For reference, over the last decade, S&P has traded at a median earnings multiple of 27.3x.And crucially, nothing about the AI disruption narrative changes that math. As covered earlier, roughly three-quarters of S&P’s profits sit in Ratings, Indices, and Energy — segments whose moats are built on regulatory designation, embedded benchmarks, and trusted standards, none of which an AI model can replicate or route around. The only piece genuinely exposed to disruption, the Cap IQ distribution layer within Market Intelligence, represents a sliver of group profits. If anything, the parts of the business most threatened by AI are also the parts that matter least to the valuation, while the parts that matter most are the parts AI can’t touch.That means the quality and durability underpinning a premium multiple today are exactly the same as they were before AI became a talking point – the disruption story changes the market’s perception of the risk, not the actual risk to the cash flows themselves.Additionally, with the arguably lower-quality, lower-margin Mobility business spun off, we get a much more straightforward company profile, with even more revenue and profits coming from Ratings, Indices, and Energy. Given this, I think we could even argue S&P deserves a premium to its historical multiples.In other words, the share-price pressure and subsequent lower multiples have no fundamental justification, and I am still very willing to pay a premium multiple for a premium business.Say we apply a 26x multiple to my currently projected 2028 profits per share, which I think is more than fair, quite cautious if anything, reflecting minimal multiple expansion and a lasting discount to historical averages. Using these inputs, I calculate an end-of-2028 target price of $612, which implies annualized returns of roughly 16%, including dividends, from a current share price of $432.That clears my 15% threshold and reflects a pretty attractive risk-reward, especially considering the caution baked in. Under more optimistic assumptions, I can see shares easily revalue to 28-30x once the market lets go of these overblown AI fears, lifting annualized returns toward 20%.In my view, S&P Global is a stunning business that, in reality, has little to fear from AI, and at a current share price of $432, or anywhere below $440, offers an excellent risk-reward for investors.On a final note, insider buying activity looks good, with no selling since August 2025 and the following big purchases so far in 2026:Director Robert Kelly picked up $1.5 million worth of SPGI shares YTD at prices between $399 and $434.Catherine Clay, CEO of Indices, picked up $1.1 million worth of SPGI shares on May 1 at $431 per share.Rating + fair value: Buy — Accumulate below $4402028 Target Price: $612Implied CAGR from current price: ~16%Please leave a like if you enjoyed this post and found it valuable!Subscribe nowDisclosure: I/we may or may not have a beneficial long position in any of the securities discussed in this post, either through stock ownership, options, or other derivatives. This article expresses our own opinions, and we are not receiving any sort of compensation for it.No recommendation or advice is being given as to whether any investment is suitable for a particular investor. The information provided in this analysis is for educational and informational purposes only. It is not intended as and should not be considered investment advice or a recommendation to buy or sell any security.Investing in stocks and securities involves risks, and past performance is not indicative of future results. Readers are advised to conduct their own research before making any investment decisions.