Raymond James downgrades S&P with ratings bull case unlikely

Raymond James analyst Patrick O’Shaughnessy downgraded S&P Global to Market Perform from Outperform without a price target. The bull case for S&P’s ratings franchise is unlikely to be realized and consensus ratings revenue expectations for 2025 and beyond are too high, the analyst tells investors in a research note. As such, the firm sees downside risk to consensus estimates. Raymond James says the slope of the long-term growth rate for ratings has likely shifted lower in recent years due to a number of factors, including the rise of private credit, corporate balance sheet de-leveraging, and higher interest rates. It sees more downgrade risk at Moody’s (MCO), a stock it cut this morning to Underperform.