Moody’s Corporation: Analyzing Stock Performance and Recent Moves
Overview of Moody’s Corporation
Moody’s Corporation (MCO), located in New York City, is a leading provider of credit ratings, research, and risk analysis services, with a market capitalization of $90.5 billion. Renowned for its financial market expertise, Moody’s helps global capital markets through a variety of services including credit evaluations, analytical tools, and detailed data.
Stock Performance Compared to Market
Over the past year, Moody’s shares have performed significantly better than the overall market. The stock has increased by 38.6%, while the S&P 500 Index ($SPX) rose nearly 31.8%. In 2024 alone, MCO stock is up 28.3%, compared to the SPX’s gain of 25.8% year-to-date.
However, when compared to the iShares U.S. Financials ETF (IYF), MCO’s performance appears weaker. The ETF has surged 50% over the past year and has seen a year-to-date increase of 39.3%.
Recent Acquisition and Stock Reaction
On November 21, Moody’s announced the acquisition of Numerated Growth Technologies, a loan origination platform tailored for financial institutions. This strategic move strengthens Moody’s Lending Suite, delivering a more comprehensive solution for clients dealing with loan origination and management. As a result of this announcement, MCO shares have increased over 5%.
Third-Quarter Earnings Report
Despite delivering its third-quarter earnings on October 22, which beat projections for both revenue and profit, MCO’s stock fell 4%. The decline is attributed to worries over macroeconomic and geopolitical factors that have overshadowed the positive results.
Analyst Expectations and Consensus Ratings
For the current fiscal year, which concludes in December, analysts predict that MCO’s earnings per share (EPS) will grow by 21.9% to $12.07 on a diluted basis. The company’s performance has been inconsistent, having exceeded consensus estimates in three of the last four quarters while falling short once.
Among 20 analysts evaluating MCO stock, the consensus rating is “Moderate Buy,” determined by nine “Strong Buy” ratings, one “Moderate Buy,” nine “Holds,” and one “Strong Sell.” This sentiment reflects a more optimistic outlook compared to two months ago when there were only eight “Strong Buy” ratings.
On October 23, Owen Lau of Oppenheimer Holdings Inc. (OPY) increased Moody’s price target from $536 to $543 while retaining an “Outperform” rating. Oppenheimer also notes that possible interest rate decreases next year could encourage investors to shift maturities from 2026 to 2025, potentially supporting further growth.
Price Targets and Growth Potential
Currently, MCO is trading above the average price target of $496.06; however, the highest target on the street at $570 suggests a potential upside of 13.8% from its current price.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
