Upgrade FDXF to BUY as the Post Spin Pull-Back Offers a More Attractive Entry Point into a Solid Long-Term Story with a Long Runway for Growth & Margin Improvement in an Attractive Transportation Niche; See the ISM PMI Reading on Monday as a Potential Near-Term Catalyst; Fair Value Estimate (FVE) is $165 per share

Recall, on June 1, 2026, FedEx Corporation (NYSE: FDX) completed the tax-free spin-off of 80.1% of FedEx Freight Holding Company (NYSE: FDXF), which is positioned as the industry’s largest domestic less-than-truckload (LTL) carrier by sales at ~$8.7 billion in F2026E (with adj. EBIT of ~$1.1 billion; see Exhibit 1). [Note: at year end FDXF will change its reporting structure to a Calendar-year from a June-ending Fiscal-year (see Exhibit 2).]

For perspective, shares of FDXF have declined ~14.5% relative to its $160.37 per share closing price in “when-issued” trading (versus a ~1.9% decline in the S&P 500 Index, of which it is a member) as well as ~27%% as compared with its recent high of $188.46 on July 9^th (compared with a 1.4% decline in the S&P).

As we have discussed with clients (perhaps ad nauseum), that while we are bullish on the LTL sector’s underlying fundamentals given the market’s consolidated nature/pricing discipline (i.e., the top 10 players control ~75% of the market and the top 5 roughly 50%) as well its more industrial-oriented bent (i.e., LTL is more levered to ISM Manufacturing PMI rather than overall GDP), among other attributes, considering the backdrop of FDXF’s seemingly conservative near-term outlook and initial valuation (i.e., at ~16x) we simply preferred a better entry point in what we view as an attractive long-term story (both from a market and internal self-help perspective). 

In that context, over the longer-term, we continue to still see no structural impediments to FDXF achieving an operating margin approaching ~20% (given underlying fundamentals, its market leadership and internal self-help potential), particularly as the company builds out its technology capabilities (and capital allocation policies) from a solely LTL-centric perspective (e.g., freight selection, pricing, routing, density, etc.) as opposed to its legacy operating platform, which was largely geared, in our estimation, with a bias toward its larger parcel parent. Anecdotally, management has indicated the goal/possibility of “significant upside” to profitability over the long-term, supported by the goal of capturing $0.50 of operating income from every $1 of gross profit generated.

That said, at least in the medium term (i.e., F2026-C2028), (see Exhibit 2), management expects compound annual top-line growth (CAGR) of ~4%-6% (with yield improvements outperforming volume growth of ~1%-2%), which along with cost controls & operating leverage should drive an operating income (EBIT) CAGR of 10%-12% (toward an adj. margin of ~15%, implying ~300 basis points of margin improvement and incrementals in the mid-to-high 20%s, by our calculation), which we note would still leave the company well-below best-in-class peer, ODFL, but roughly more in-line with XPO).

Capital expenditures are expected to be ~5% of sales, of which 45% will be deployed to equipment with 25% each for facilities & technology (and remainder classified as “other”).  Free cash flow (FCF) conversion is expected to exceed 90%, implying roughly ~$1 billion of annual FCF generation, which will be deployed towards achieving a leverage ratio of ~2.5x or below within 12-months of the transaction’s completion. Also, the company intends to maintain an investment grade credit rating and is likely to institute a dividend (looking into 2027E) while share repurchases, at least initially, will largely be aimed at offsetting dilution.  Notably, management’s forecasts are not dependent on an overall market rebound, but in terms of target markets the company intends to focus on making further inroads in several nascent verticals, including higher-margin small- & medium sized businesses (SMB) as well the ~$6 billion healthcare market and the grocery and data center segments, which represent ~$1 billion and $2 billion opportunities, respectively. 

On the former macro point, while management’s current projections are, again, not predicated on a material improvement in underlying demand we would note that ISM’s Manufacturing PMI has picked up in recent months after a prolonged downturn (see Exhibit 4). [Note: a reading above 50 generally indicates expansion in the manufacturing sector while reading below 50 signals contraction; that said, over time a reading above 47.5 has broadly indicated expansion in the overall economy.] 

In that context, we think a strong ISM PMI print, which we expect will be reported on Monday (at 10 a.m. EST) and show continued expansion (e.g. a reading likely somewhat in-line with July), could be a modest near-term catalyst.

All told, given the stock’s post-spin decline and with shares trading at ~13.5x 2028E EV/EBITDA, 19.5x 2028E EV/EBIT and 19.0x 2028E FCF, leaving ~20% to our $165 per share fair value estimate (see Exhibit 5 & 6), we shift our recommendation to BUY (from NEUTRAL).

Please see our initiation reportdated April, 6 2026 and updates from 4/9/2026, and 6/1/2026, for more information.

Nestlé’s portfolio simplification, the original catalysts for our Radar coverage, has now largely played out, prompting Canyon River to discontinue coverage. The remaining in-house ice-cream business is being transferred into Froneri, the existing 50:50 joint venture with PAI Partners, shifting Nestlé from direct operation toward equity participation—mirroring Unilever’s Magnum Ice Cream spin-off.

Separately, Nestlé has agreed to form Peranel, a new 50:50 joint venture with Platinum Equity for its Waters & Premium Beverages business, headquartered in Paris under CEO Muriel Lienau, with Nestlé retaining a 50% stake and receiving substantial cash proceeds; the deal is expected to close in H1 2027.

NPKI reports modestly above consensus 2Q 2026 results and similar increase to full-year 2026E guidance, at the mid-point; still plans a ~50% expansion of manufacturing capacity by mid-2027 supporting double-digit Rental growth over the next several years amid durable underlying demand trends; recent pull-back presents a buying opportunity, in our view

Last night, after the market close, NPK International (NYSE: NPKI) reported 2Q 2026 results with sales from continuing operations up ~13.5% to $81.6 million (versus consensus of $80.1 million) with adj. EBITDA higher by ~37% to $25.7 million (on 400 bps of margin improvement to 31.5%) and adj. EPS up ~36.5% to $0.15 (compared with consensus of $0.13 and $0.11 in the prior year period).  Free cash flow (FCF) was $5.9 million versus ~$11 million in the prior year quarter, largely due to ~$5 million of increased capital spending to support growth.

Year-to-date, total revenue increased ~18% to $156.6 million, driven by similar rates of growth in rental & services (~67.5% of sales) and product (32.5%) revenue amid continued strong demand from utility & critical infrastructure customers, while adj. EBITDA and adj. EPS rose ~25% and 17.5%, respectively, to $48.2 million and $0.27.

The company ended 2Q 2026 with net debt of ~$2.2 million (compared with ~$12 million at the end of 2025 and $4.0 million at the end of 1Q 2026), including ~$8.35 million of cash and ~$10.5 million of debt, leaving ~$148 million of total liquidity.

In terms of capital allocation, given the health of its balance sheet (and durability of its demand outlook) the company will continue to return capital to shareholders (e.g., NPKI repurchased ~4% of shares in 2025 and ~0.55% in 2026), invest in expanding its current composite matting fleet (where the cash-on-cash returns have historically been ~25%-plus) as well as evaluate small tuck-in acquisitions within its core critical infrastructure markets (e.g., the $42 million acquisition of U.K.-based Grassform, in late-November 2025). 

On its capacity/fleet expansion efforts, the company still intends to invest $40-$45 million over the next several quarters to expand its manufacturing capacity by ~50%, which is scheduled to begin to come online in mid-2027.  To be sure, this level of incremental spend, albeit a long-term good/necessity, likely causes some degree of near-term investor angst we would note that management has, in its public comments, downplayed the medium-term impacts on either financial returns (i.e., ROIC) or utilization (and that the additional capacity likely sets the company up to support solid growth through the end of the decade).

In terms of financial guidance (see Exhibit 1 on page 2), management modestly raised the mid-point of its full-year 2026E outlook, which now calls for sales of $313-$323 million (up from its initial $305-$325 million and its previous outlook of $310-$325 million, implying ~15% year-over-year growth, at the mid-point, driven by “double-digit organic growth” in rental & services, with adj. EBITDA of $92-$102 million (up from $88-$100 million and compared with consensus of ~$92.5 million), implying ~32% growth.

Full-year 2026E capital expenditures are expected to be $65-$80 (up from the initial $45-$55 but down from the previous $75-$90 million forecast, including $20-$25 million of the incremental manufacturing capacity investment (down from $30-$35 million due to timing) aimed at capitalizing on what management describes as a “a multi-year capital cycle” for its utility/energy transmission customers as well as “sustained market conversion from timber to composite”.  (Notably, management has anecdotally indicated that composite solutions currently have ~25% market share with timber & stone remaining the dominant, albeit legacy, solutions, in our view.)

Our base case fair value for NPKI (formerly NR) remains $17.50 based on a 13.5x multiple of 2027E adjusted EBITDA and accounting for projected net debt (see Exhibit 2 on page 3).  [Note: NPKI changed its corporate moniker from Newpark Resources (old ticker NR) in December 2024 following the sale of its Fluid Systems (or oil field services) business and, subsequently, in late-May 2025 changed its Global Industry Classification Standard (GICS) classification to Industrials/Capital Goods/Trading Companies & Distributors (from oil field services).]

All told, while shares have more than doubled since our initial recommendation in January 2024, we think the recent ~20% pullback so far this month amid a wider tempering in AI/data center expansion optimism (which is a market NPKI could tangentially be a significant benefactor but where it currently has no mats deployed ), presents an attractive entry/incremental addition point for investors given its multiple existing demand drivers (e.g., utilities investing in capacity expansion & grid hardening, representing ~70% of sales, as well as the energy, construction, and industrial) along with its market share (versus legacy solutions), geographic expansion, operating leverage and nearshoring opportunities.

Gerresheimer’s strategic transformation continues, with the key new development being a definitive agreement to sell Centor and its global Primary Packaging Plastics business to Apax Funds at a combined enterprise value of ~€1.5 billion, using proceeds to reduce leverage and support refinancing. This follows the previously announced separation of the Moulded Glass business, now operating as a standalone segment under Hans-Norbert Topp, with the Chicago Heights plant slated for closure and production shifting to Italy and India.

Leadership has stabilized, with Uwe Röhrhoff confirmed as interim CEO succeeding Dietmar Siemssen, alongside a new CFO and management board member. Separately, Gerresheimer has published its delayed FY2025 financials following an internal investigation into revenue recognition and inventory valuation practices, resulting in prior-period restatements and remediation steps including discontinuing bill-and-hold accounting and strengthening internal controls; the statements received an unqualified audit opinion.

FY2025 results reflected weak organic growth, margin compression, a net loss, and negative free cash flow, with no dividend paid; FY2026 guidance anticipates continued negative free cash flow before improvement from the Centor divestment and refinancing. On valuation, we apply discounted peer multiples to the Moulded Glass and remaining pharma-focused businesses, then nets out the Apax disposal proceeds and balance-sheet adjustments to arrive at an implied equity value of ~€27 per diluted share.

DCC Energy plc (DCC LN) has agreed to a recommended take-private acquisition by the KKR/Energy Capital Partners consortium, valuing the company at approximately £5.75 billion, after rejecting the consortium’s initial £5.0 billion proposal and negotiating up from a revised £5.7 billion offer submitted June 10. Shareholders will receive 6,525 pence per share in cash plus the FY2026 final dividend of 147.22 pence (already paid July 23), and may receive an additional contingent payment of up to 125 pence per share tied to the successful sale of the Nexora Technology business for at least $800 million, bringing total potential consideration to £67.97 per share, a roughly 26% premium to DCC’s pre-approach share price.

The Board unanimously recommended the deal given the valuation and removal of execution risk, with completion expected in 1Q 2027 pending shareholder, court, and regulatory approvals; the company has also been renamed DCC Energy plc to reflect its transformation into a pure-play energy business. This follows the completed £945 million Healthcare divestment and £600 million tender offer from late 2025, alongside continued portfolio moves including the FLAGA GmbH and UGI International liquid-gas acquisitions and the ongoing evaluation of strategic alternatives for the remaining Technology segment. 

Considering the announcement of the agreed upon acquisition, we will discontinue Radar coverage of DCC Energy going forward.

LXFR agrees to be acquired by Wynnchurch Capital for $17.37 per share in cash; the transaction is expected to be completed before the end of 2026

Luxfer Holdings (NYSE: LXFR), which completed the divestiture of its Graphic Arts business in July 2025, announced an agreement to be taken-private by Wynnchurch Capital, L.P. for $463 million or $17.37 per share in cash.

The transaction, which has been unanimously approved by the Board and is expected to close before the end of calendar 2026, implies a ~31% premium to the stock’s closing price on April 28, 2026 (the day before the company reported 1Q 2026 results, modestly increased full-year guidance and indicated that it continued to pursue value-unlocking strategic alternatives).

In our view, the deal, which includes non-solicitation provisions as well as termination penalties of $18 million and $32.25 million for LXFR and Wynnchurch, respectively, is likely to close as announced, particularly considering it is broadly consistent with our initial estimate of fair value (i.e., ~$450 million or ~$17 per share).

Upgrade HONA to BUY (from NEUTRAL) as Post-Spin Pullback Presents a More Attractive Entry Point into a Core A&D Supplier with Defense & Space Exposure and A Growing High-Margin Aftermarket Component

Recall, Honeywell Aerospace (NASDAQ: HONA) was spun-off, tax-free, from Honeywell Technologies (NASDAQ: HON) on June 25, 2026.

For perspective, in so-called “when-issued” trading shares of Honeywell Aerospace (HONAV) opened (and closed) on 6/15/2026 at $200 per share on de minimis volume before hitting a high on 6/17 of $269.95 per share (on volume of ~10K shares) before consistently trading down to $245 per share on 6/24 (on average daily volume of ~30K shares) and ultimately closing on 6/26/2026 at $221.01 per share (on volume of ~3.5 million shares).

That said, so far, in “regular way” trading shares have declined an incremental ~11.5% (versus a ~1% rise in the S&P 500 and a ~2.5% decline in the Russell 2000); to that end, the stock currently trades at ~14.5x 2027E EV/EBITDA, ~19.5x 2027E EPS and a free cash flow (FCF) yield of ~4.5%, which represents a stark discount to peers, perhaps most relevantly RTX Corporation (NYSE: RTX), which includes the Collins Aerospace & Pratt & Whitney subsidiaries, at ~17.6x 2027E EV/EBITDA, 27.5x 2027E EPS and a ~3.0% yield, respectively.

From our perspective, the stock’s initial weakness has not been wholly unexpected considering the back end weighted medium-term guidance that was delivered at its capital markets day (on June 3rd), which was in stark contrast, at least on a relative basis, to the front-end loaded guidance provided by RemainCo. A sentiment we articulated at the time.

In terms of a baseline, on a pro forma basis, HONA expects full-year 2026E sales to rise ~7%-9%, implying sales of $18.6-$19.0 billion, by our calculation, driven by mid-to-high single digit growth across all three segments, with adjusted EBIT of $4.65-$4.75 billion, implying a margin of ~25%. Also, HONA expects to generate ~$1.0-$1.5 billion (see Exhibit 1) in 2H 2026 (i.e., the back-half).

The company expects to report 2Q 2026E results, it’s first as a standalone company, after the market close on August 4th with a conference call that evening at 5 p.m. (ET). Based on reported results at its former parent, which still included the Aerospace business, HONA is implied to have generated, by our calculation, ~$4.5 billion of sales, ~$1.075 billion of operating profit (versus consensus of ~$4.6 billion, $1.1 billion) and $796 million of FCF.

In the medium-term (i.e., 2025-2028E), HONA has guided to consolidated annual top-line growth of ~6%-8% (see Exhibit 2), driven by mid-to-high single digit growth in both the commercial OE market and commercial aftermarket (AF), supported by aging fleets, and multi-year backlogs among both commercial & business customers (i.e., ~$18.6 billion at the end of 1Q 2026), while defense & space is expected to grow at a mid-single digit rate as national defense spending has become a higher priority globally in the current geopolitical environment (e.g., Canada, Germany, India, Japan, Turkey & the U.K. all significantly ramping spending). Adj. EBIT is expected to grow at a faster rate than sales, at ~9% in 2025-2030E primarily driven by volume/mix, price/cost & productivity, implying ~$6.5 billion in adjusted EBIT in 2030E and an adj. margin of ~25.5%-28.0%.

Free cash flow is expected to grow at an even faster clip than EBIT at a rate of ~10% annually, implying total free cash flow of ~$4.0 billion in 2030E (i.e., on an aggregate rather than cumulative basis). Company-funded (as opposed to customer-funded) research & development (R&D) costs are expected to be >4% of sales (slightly above its 3-year average) while maintenance capital spending is projected to be ~1%-2% of sales, which we think in tandem support a solid pipeline of next-generation avionic, engine & communication systems as well as emerging advanced air mobility (AAM) capabilities, such as electric vertical takeoff & landing (eVTOL) & urban air mobility.

Anecdotally, our conversations with investors as well as the stock price suggest that while HONA’s medium-term outlook wasn’t overtly disappointing its was perhaps slightly underwhelming on several fronts, including top-line growth projected only in-line to modestly above market growth and its commentary that anecdotally suggested the progression of EBIT & FCF generation will not be linear given, among other things, initial standup costs/dis-synergies as well as the intent to front-end load growth investments, implying an acceleration in those metrics is more likely pushed out until 2029-2030 (with implied incremental margins improving from the 20%-25% range in 2027E-2028E to a more respectable ~30% or above in 2029E-2030E).

That said, we do think the long-term backdrop for HONA’s global platform given its sector/market exposures, growing backlog as well as the fact that high-margin, recurring MRO/aftermarket work, of which ~70% is subject to long-term contracts, should exceed 50%-55% of sales over the next decade, lend credence to management’s aspirations of achieving ~$30 billion of sales (10-years out), although we discern this target likely includes a modicum of tuck-in M&A activity.

Regarding the deployment of free cash flow which we estimate could be ~$15 billion (on a cumulative basis) in 2H 2026E-2030E, the company intends to maintain a disciplined capital allocation paradigm, focused on investing in organic growth opportunities/innovation, which will complimented by strategic tuck-in acquisitions (aimed at adding technology capabilities or expanding its global footprint into attractive markets) as well as returning capital to shareholders. On the latter front, the company intends to institute a “competitive” (but as yet undefined) dividend and engage in opportunistic share repurchases. All that said, the company targets the maintenance of a 2.5x leverage ratio over the medium term (modestly above the group average, which is closer to 1.5x, by our calculation).

All told, given the post-spin dip in HONA’s stock price (i.e., 11.5% versus a 1% rise in the S&P) as well as its discount to broader peers, including RTX (i.e., 14.5x versus ~17.5x) and the implied upside of ~25% to our fair value estimate we lift our recommendation to BUY (from NEUTRAL).

Please see our initiation report dated June 12, 2026 and spin-off completion update dated June 29, 2026 for more information.

Close coverage of SMG, effective as of today’s market bell, with shares trading roughly in line with our fair value estimate (FVE) and the divestment of its cannabis-related assets completed

• For context, shares of The Scotts Miracle-Gro Company (NYSE: SMG) returned ~42.5% (outperforming the S&P 500 and Russell 2000 indexes by ~13.5% and ~0.1%, respectively) since our initial recommendation in December 2024.
• That said, with the stock trading roughly in-line with our initial fair value estimate of ~$72 per share (with bull & bear cases of $80.50 & $63.50) and the divestment of its cannabis-related assets (i.e., Hawthorne) completed during 2Q F2026, we prefer to maintain a disciplined approach and focus our resources on potentially more compelling/topical special situations; thus, we will close coverage/withdraw our recommendation of SMG, as of today’s market close.  (As such, our estimates will not be updated moving forward and should not be relied upon in the future, other than simply for reference.)
• As always, we will continue to monitor the shares for an opportunity to re-recommend if valuation shifts or if incremental strategic options emerge. 

MIDD Completes the Tax-Free Separation of its Commercial Food Service and Food Processing Businesses

Distribution: On July 6, 2026, at 12:01 a.m. (ET), The Middleby Corporation (NASDAQ: MIDD) completed the tax-free spin-off of 100% of its Food Processing business, Midera Food Processing (NASDAQ: MFP).  RemainCo will consist of the Commercial Foodservice business and maintain its current listing while SpinCo (i.e., Midera) will trade under the NASDAQ ticker MFP. Shareholders of record received one share of MFP for every share owned of MIDD (i.e., a 1-for-1 distribution ratio). 

When-issued Trading: For perspective, in the so-called “when-issued” trading shares of Midera Food Processing (MFPVV) opened (and closed) on 6/29/2026 at $35 per share on volume of 82K shares before hitting a high on 6/30 of $40 per share (on volume of ~30K shares) and ultimately closing on 7/6/2026 at $35.05 per share (on average volume of ~150K shares). For its part, Middleby (MIDDV) opened & closed on 6/30/2026 at $81 per share on volume of less than 1K shares before opening & closing on 7/2-7/6 at $139.52 (on aggregate volume of just 1.5K shares).

Regular-way Trading & Indexation: Shares of MFP (as well as post-spin MIDD) commence so-called “regular way” trading this morning, July 7, 2026. Pre-spin MIDD is a member of the S&P Mid-Cap 400; by our calculation the leading mid-cap focused ETFs (e.g., IJH, MDY, SPMD, IWR, SPMD & IVOO) collectively own slightly less than 6% of the float (or nearly 2.5 million shares) with roughly 20% of the shares being controlled by ETFs more broadly. For its part, post-spin MFP is set to replace Redwood Trust (NYSE: RWT) in the S&P SmallCap 600 before the market open on July 8^th.  So, while we can envision some mild initial index-related pressure for SpinCo (i.e., MFP) we also acknowledge the possibility for some shareholder rotation-related volatility at RemainCo (i.e., MIDD), which is positioned as the relatively slower growing (i.e., ~3%-6% organic sales growth) but more profitable (i.e., margins of 20% in 2026E improving to ~25%-27% in 2028E), less capital intense/higher free cash flow (FCF) generating (i.e., capex <2% of sales & FCF conversion of ~100% of net income) entity albeit being initially more levered (i.e., net leverage of ~2.8x moving to 2.5x by the end of 2026E) and more broadly focused on capital returns, primarily via share repurchases while, on the other hand, SpinCo (i.e., MFP) will emerge as the faster growing concern (i.e., ~5%-7%, on an organic basis, with incremental upside from acquisitions), albeit with lower margins (i.e., ~18% in 2026E moving to ~20%-23% in 2028E), free cash flow conversion (i.e., 50%-55% of adj. EBITDA on a capex spend of ~2.0%-2.5% based on sales) and initial leverage (i.e., $200-$225 million or ~1.25x); that said, post-spin Midera management indicates comfort with flexing its leverage ratio up to ~3.0x as it pursues an active acquisition strategy.

Pre- & Post-spin Recommendations: Following our initial pre-spin BUY in May 2026, shares of consolidated MIDD appreciated ~25% (outperforming the S&P 500 and Russell 2000 by ~24% and ~18.5%, respectively). 

All told, on a post-spin basis, we value RemainCo (i.e., Commercial Foodservice) at $148 per share and ~$39.50 per share from SpinCo (i.e., Food Processing or Midera), based on a one-for-one distribution ratio (and 2028E EV/EBITDA multiples of 12.5x and 10x, respectively).  Given the implied upside to our fair values estimate (FVE) following the strong pre-spin stock price appreciation (i.e., shares up ~25% since late-May) our initial recommendations for both post-spin entities are NEUTRAL.  As mentioned earlier, in the longer term, while RemainCo (MIDD) will be focused on shareholder returns, SpinCo (MFP) could see a higher degree of multiple re-rating over time if it can successfully execute on its M&A strategy (i.e., establish itself as a high-quality foodservice compounder within a fragmented global market). 

Also, please see The Spin-Off Report dated May 21, 2026, for more information (as well as the Appendix on pages 4-7).

SPGI Recasts its Post-Spin Reporting Structure; Downgrade Shares to NEUTRAL (from BUY) given Strong Post-Spin Price Appreciation and Shares Trading Roughly In-Line with our Initial Fair Value Estimate (FVE)

Today, S&P Global (NYSE: SPGI), which completed the tax-free separation of Mobility Global Inc. (NYSE: MBGL) on July 1st, provided a recast of its post-spin operating structure as well as updated financials.

To that end, we note that S&P Global will provide certain post separation services to Mobility Global on a transitional basis under the Transition Services Agreement, which amounted to ~$35 million for 2025. We also note that the Energy division bears the bulk of costs historically allocated to Mobility that do not meet the requirements to be presented in discontinued operations.

Also, Market Intelligence will now present Kensho Data & Platforms (60% of re-cast 2025 division revenue) and Enterprise Solutions (40%). We see the rebranding of Data, Analytics & Insights into Kensho Data & Platforms as sharpening its focus on AI-powered distribution (i.e., Kensho is S&P’s major AI investment) while the consolidation of its distribution capabilities under a single brand is also seemingly the first step toward better competing with Bloomberg and Factset. Enterprise Solutions will include lending solutions (i.e., ClearPar, Debtdomain, pricing & reference data, Notice Manager, and Wall Street Office), market solutions (i.e., iLEVEL, Primary Markets Group, and Valuation Services), and software & regulatory solutions (i.e., Cappitech, Corporate Actions, Counterparty Manager, Financial Risk Analytics, and Tax Solutions), acting as a potentially higher-growth vertical, albeit more volatile. Further, Market Intelligence will transfer 451 Research and Maritime & Trade to Energy, as well as Credit Analytics to Ratings. This is in line with our initial thoughts that RemainCo will transform into ‘an integrated all-service financial information platform, with Market Intelligence [more specifically Kensho Data & Platforms], or its equivalent, being at the center.

Energy will now present Platts (49% of re-cast 2025 division revenue) and CERA (51%). In our view, Platts will serve as the bedrock of S&P’s Energy offerings by focusing on objective information (benchmarks, data, news), feeding into Market Intelligence (Kensho) and CERA. CERA, on the other hand, will offer more analytics and advisory/consultation services (e.g., CERAWeek); we reiterate our view that Energy will venture into providing more advisory and consultation services given the emphasis on this ‘previously-hidden’ business line.

Given SPGI’s strong post-spin price appreciation, which has seen shares increase ~16.5% (versus a ~0.5% rise in the S&P 500 Index), and the shares trading roughly in-line with our initial fair value estimate we temper our recommendation to NEUTRAL (from BUY).

Please see our initiation report dated June 15, 2026 and spin-off completion report dated July 1, 2026 for more information.