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New York-based MSCI Inc. (MSCI) provides critical decision support tools and solutions for the investment community to manage investment processes. Valued at a market cap of $48.4 billion, the company offers portfolio construction and risk management products and services, Environmental, Social, and Governance (ESG) research and ratings, and real estate research, reporting, and benchmarking services.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and MSCI fits right into that category. With more than 50 years of expertise in research, data, and technology, the company enables its clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios.
The financial data company has slipped 2.1% from its 52-week high of $631.70, achieved on Oct. 29. Shares of MSCI have gained 10.8% over the past three months, almost in line with the broader Financial Select Sector SPDR Fund’s (XLF) 10.6% gains over the same time frame.
In the longer term, MSCI has gained 22.1% over the past 52 weeks, lagging behind XLF’s 37.6% returns. Moreover, on a YTD basis, shares of MSCI are up 9.3%, significantly underperforming XLF’s 32.2% gains over the same time frame.
To confirm its recent bullish trend, MSCI has been trading above its 200-day moving average since early August and has remained above its 50-day moving average since late November.
On Oct. 29, shares of MSCI fell 2.7% after its Q3 earnings release despite delivering a strong performance. The company’s revenue climbed 15.9% year-over-year to $724.7 million and exceeded the forecasted figure by 1.5%. Its adjusted earnings of $3.86 per share transcended the consensus estimates of $3.77 and increased 11.9% from a year ago.
Moreover, its recurring subscriptions of $536.6 million increased by 15.4% from the year-ago quarter. MSCI primarily benefited from robust demand for its products and services. However, a decline in net new recurring sales in the ESG and climate segment might have slightly dampened investor confidence in the stock.
MSCI has lagged behind its rival, S&P Global Inc. (SPGI), which gained 23.6% over the past 52 weeks and 16.5% on a YTD basis.
As MSCI outperformed its industry peers recently, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 19 analysts covering it, and the mean price target of $647.86 suggests a 4.7% premium to its current levels.
