Tuesday, Oppenheimer updated its outlook on Moody's Corporation (NYSE:MCO), increasing the price target to $424 from $411, while maintaining an Outperform rating on the stock. The adjustment follows a revision of the first-quarter earnings per share (EPS) estimate, which was raised approximately 12% to $3.17 from $2.84, primarily due to higher-than-anticipated revenue in the Ratings segment. This new estimate suggests an 11% potential upside compared to the consensus.
The firm also reaffirmed its full-year 2024 EPS forecast for Moody's at $10.68, aligning with the company's guidance range of $10.25 to $11.00. Furthermore, the 2025 EPS estimate remains unchanged at $12.46. The new price target is based on a 34x multiple of the firm's 2025 earnings estimate.
The analyst notes that Moody's valuation is on the higher end, which reflects the market's high expectations for a recovery in issuance and the company's strong competitive position. As the earnings call approaches, the focus points for investors are anticipated to be a guidance update, the monetization potential of AI products including Moody's Research Assistant, the outlook for issuance, and opportunities for margin expansion in Moody's Analytics (MA).
The revised price target indicates confidence in Moody's business prospects and its ability to capitalize on market opportunities in the near future. The company's strategic initiatives, particularly in AI and analytics, are expected to contribute to its growth trajectory and be key topics of interest during the upcoming earnings discussion.
InvestingPro Insights
As Moody's Corporation (NYSE:MCO) garners attention with its revised outlook and upcoming earnings call, real-time data from InvestingPro provides a deeper look into the company's financial health and market performance. Moody's has demonstrated a strong commitment to shareholder returns, boasting a perfect Piotroski Score of 9, reflecting high financial strength, and a track record of raising its dividend for 14 consecutive years, signaling confidence in its financial stability and future earnings.
InvestingPro Data shows Moody's with a robust market capitalization of $71.91 billion and a high Price/Earnings (P/E) ratio of 45.05, indicating that investors may expect significant growth and profitability. While this highlights a premium valuation, the company's revenue growth over the last twelve months stands at a solid 8.19%, suggesting an upward trajectory in earnings. Additionally, Moody's is trading near its 52-week high, with the price at 96.63% of this peak, which could be a sign of strong investor confidence or, conversely, a caution for those wary of buying at high valuations.
For investors seeking further insights, there are additional InvestingPro Tips available, including analysis on the company's near-term earnings growth and liquidity position. To explore these valuable insights and make more informed investment decisions, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.