Earnings Preview: What to Expect From MSCI's Report

New York-based MSCI Inc. (MSCI) provides critical decision support tools and solutions for the global investment community to manage investment processes. Valued at $39 billion by market cap, the company’s research, data, and technology expertise enables clients to understand and analyze key drivers of risk and return, helping build more effective portfolios. Its research-enhanced solutions help clients gain insights and improve transparency across the investment process. The leading investment research firm is expected to announce its fiscal second-quarter earnings for 2024 before the market opens on Tuesday, July 23.

Ahead of the event, analysts expect MSCI to report a profit of $3.56 per share on a diluted basis, up 9.2% from $3.26 per share in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports. During the previous quarter, the company’s recurring subscriptions in its index segment rose 8.3% year over year to $212.95 million due to strong growth from market-cap-weighted and custom index products and special packages.

For fiscal 2024, analysts expect MSCI to report EPS of $14.67, up 8.5% from $13.52 in fiscal 2023.

MSCI stock has significantly underperformed the S&P 500’s ($SPX) 16.8% gains on a YTD basis, with shares down 13% during this period. Similarly, it has underperformed the S&P 500 Financials Sector SPDR’s (XLF) 10.5% gains over the same time frame.

On Apr. 23, MSCI shares closed down more than 13% after it reported its Q1 results. Its operating revenue was $680 million, falling short of the consensus estimate of $685.2 million. Its revenue miss was due to subscription cancellations and a contraction in margins due to one-time expenses. The company’s adjusted EPS of $3.52 surpassed the Wall Street estimates of $3.44.

Analysts’ consensus opinion on MSCI stock is bullish, with a “Moderate Buy” rating overall. Out of 17 analysts covering the stock, seven advise a “Strong Buy” rating, two have a “Moderate Buy” rating, seven recommend a “Hold” rating, and one gives a “Strong Sell.” The average analyst price target for MSCI is $562.09, indicating a 14.2% potential upside from the current levels.

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On the date of publication, Dipanjan Banchur 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.

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