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New York-based Moody's Corporation (MCO) operates as an integrated risk assessment firm. With a market cap of $88.4 billion, the company provides credit ratings and related research, data and analytical tools, quantitative credit risk measures, risk scoring software, credit portfolio management solutions, and securities pricing software and valuation models.
Companies worth $10 billion or more are generally described as “large-cap stocks.” MCO rightly fits into that category, with its market cap exceeding this mark, underscoring its size, influence, and dominance in its industry. MCO dominates the credit rating industry, leveraging its esteemed brand and vast global reach to drive significant revenue growth. By expertly capitalizing on favorable market conditions, including tight credit spreads and robust investor demand, Moody's showcases its agility in responding to market shifts.
MCO has slipped 2.4% from its 52-week high of $490.18, achieved on Sep. 3. Over the past three months, MCO stock has gained 18.7%, outperforming the Dow Jones Industrials Average’s ($DOWI) 5.5% gains during the same time frame.
In the longer term, shares of MCO rose 22.5% on a YTD basis and climbed 40.9% over the past 52 weeks, outperforming DOWI’s YTD gains of 8.4% and 17.9% returns over the last year.
To confirm the bullish trend, MCO has traded above its 200-day moving average since November 2023. Also, it is trading above its 50-day moving average since early May.
MCO has maintained strong performance due to its thriving analytics business, which has helped offset the downturn in its rating business. Investors are also encouraged by rising issuance volumes, signaling a positive outlook for MCO. With a strong economic moat, the company is well-positioned to benefit from higher demand for debt issuance and maintain its leading role in the capital markets.
On Jul. 23, MCO shares closed up marginally after reporting its Q2 results. The company’s revenue increased 21.6% year over year to $1.8 billion. Its adjusted EPS came in at $3.28, up 42.6% year over year. MCO expects full-year adjusted EPS to be between $11 and $11.40.
In the competitive arena of Financial Data & Stock Exchanges, Intercontinental Exchange, Inc. (ICE) has taken the lead over MCO, delivering 24.6% returns on a YTD basis. However, ICE shares have slightly lagged behind MCO stock, with 39.1% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on MCO’s prospects. The stock has a consensus “Moderate Buy” rating from the 20 analysts covering it. While MCO currently trades above its mean price target of $475.06, the Street-high price target of $530 suggests an upside potential of 10.7%.
On the date of publication, Neha Panjwani 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.
