/Moody)
Moody's Corporation (MCO), based in New York City, is a premier provider of credit ratings, research, and risk analysis, boasting a market cap of $90.5 billion. Widely recognized for its expertise in financial markets, Moody's supports global capital markets with a broad suite of services, including credit assessments, data, and advanced analytical tools.
Shares of the financial services company have significantly outperformed the broader market over the past year. The stock has gained 38.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.8%. In 2024, the stock is up 28.3%, while the SPX has gained 25.8% on a YTD basis.
Narrowing the focus, MCO underperformed when compared to the iShares U.S. Financials ETF (IYF). The exchange-traded fund has gained 50% over the past year and 39.3% on a YTD basis.
On Nov. 21, Moody’s announced its acquisition of Numerated Growth Technologies, a loan origination platform for financial institutions. This move enhances Moody’s Lending Suite, offering customers a comprehensive end-to-end solution for loan origination and monitoring. MCO shares have been trading in the greens, rising more than 5% since the announcement.
However, the company posted its third-quarter earnings on Oct. 22, and its shares dropped 4%. Despite beating its top line and bottom-line projections, potential headwinds from macroeconomic and geopolitical uncertainties dimmed its price action.
For the current fiscal year, ending in December, analysts expect MCO’s EPS to grow 21.9% to $12.07 on a diluted basis. The company's earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 20 analysts covering MCO stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds,” and one “Strong Sell.”
This consensus is more bullish than two months ago when the stock had eight “Strong Buy” ratings.
On Oct. 23, Oppenheimer Holdings Inc. (OPY) analyst Owen Lau raised Moody's price target to $543 from $536 and maintained an “Outperform” rating. Additionally, Oppenheimer notes that potential rate decreases next year could shift maturities from 2026 to 2025, supporting further growth.
Although MCO currently trades above the mean price target of $496.06, the Street-high price target of $570 suggests an upside potential of 13.8% from the prevailing price level.
