Financials

Moody’s (MCO) reported Q4 adjusted earnings Tuesday of $2.19 per diluted share, compared with $1.60 a year earlier. Analysts polled by Capital IQ expected $2.32. Revenue for the quarter ended Dec. 31 was $1.48 billion, compared with $1.29 billion a year earlier. Analysts surveyed by Capital IQ expected $1.49 billion. For full-year 2024, the company said it expects adjusted diluted EPS of $10.25 to $11.00, and expects revenue to grow in the high-single-digit to low-double-digit percent range. Analysts polled by Capital IQ are expecting adjusted EPS of $11.15 on revenue of $6.52 billion.

Shares of Moody’s fell after the company logged lower earnings and revenue in the fourth quarter than analysts had been expecting. The New York credit-ratings and research firm posted adjusted earnings, which strip out one-time items, of $2.19 a share for the fourth quarter. Analysts had been projecting $2.33 a share, according to FactSet. Quarterly revenue jumped 15% from a year ago to $1.48 billion but was shy of forecasts for $1.49 billion, according to FactSet.

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We increase our 12-month target price by $60 to $460, on a forward P/E of 36.3x our 2025 earnings estimate, a premium to Moody’s Corporation (NYSE:MCO)’s three- and 10-year forward historical averages of 31.4x and 26.0x, respectively, given expectations for margin expansion and rapid earnings growth. We lower our 2024 EPS estimate by $0.39 to $11.14 and start 2025’s at $12.63. MCO posted Q4 adjusted EPS of $2.19 versus $1.60, $0.13 below consensus on revenue of $1.48B (+15% Y/Y). MIS (the ratings segment) saw revenue surge 19% as debt capital markets improved from previous depressed levels. Decelerating growth (11% in 4Q vs. 13% in 3Q) was seen in MA (the analytics segment), as a rising demand for MCO’s ratings data feeds was met with a slowdown in

NEW YORK, NY – February 13, 2024 – Moody’s Corporation (NYSE: MCO) today announced results for the fourth quarter and full year 2023, and provided its outlook for full year 2024. REVENUE Fourth Quarter 2023 •Revenue increased 15%, or 13% on a constant currency basis1, from the prior-year period. •MA’s revenue grew 11%, or 10% on a constant currency basis1, from the prior-year period, with all lines of business achieving double-digit revenue growth. •MIS’s revenue grew 19%, or 17% on a constant currency basis1, from the prior-year period, as debt capital markets continued to recover and the outlook for macroeconomic conditions improved. Full Year 2023 •Revenue increased to $5.9 billion, up 8% from the prior year. •MA’s revenue grew 10% from the prior year, to over $3 billion, now representing 52% of MCO’s total revenue. •MIS’s revenue grew 6% as markets stabilized and issuers acclimatized to the higher interest rate environment. •Foreign

The following is a summary of the Moody’s Corporation (MCO) Q4 2023 Earnings Call Transcript: Financial Performance: Moody’s reported an 8% increase in revenue and a 16% rise in adjusted diluted EPS in 2023. The company’s adjusted recurrent revenue growth was 10% with mid-90% retention rates. For the upcoming year, Moody’s expects an adjusted diluted EPS in the range of $10.25 to $11, assuming a tax rate of 22% to 24%. The 2024 growth forecast for Moody’s Analytics is around 10% revenue growth with adjusted recurring revenue growth in low double digits. Increased budgeted operating expenses for the next year by an extra $60 million are planned. Moody’s projects a 2024 revenue growth in the high single to low double-digit percent range. The predicted adjusted operating margin for 2024 lies between 44% to 46%. The company anticipates a free cash flow between $1.9 billion to $2.1 billion in 2024. Business

Moody’s (MCO) strategic investments across multiple areas could help the company deliver growth in the mid term despite weighing down on its margins currently, RBC Capital Markets said in a note emailed Wednesday. According to the investment firm, Moody’s $60 million investments in areas including generative AI and new products and enhanced offerings could end up delivering low-to-mid teens revenue growth in the Moody’s Analytics business segment over the mid term. The firm is also expecting a “potential upside” in the Moody’s Investors Service segment from capital market activity, which, along with growth in the Moody’s Analytics division “bodes well for the stock.” The firm has an outperform rating on the company’s stock with a price target of $450.

Moody’s (NYSE:MCO) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 02/14/2024 -6.42% Stifel $362 → $350 Maintains Hold 01/03/2024 14.97% BMO Capital $366 → $430 Maintains Outperform 12/15/2023 21.66% Wells Fargo $365 → $455 Upgrades Equal-Weight → Overweight 10/26/2023 -10.96% Stifel $344 → $333 Maintains Hold 10/26/2023 1.87% RBC Capital → $381 Reiterates Outperform → Outperform 10/26/2023 -2.14% BMO Capital $399 → $366 Maintains Outperform 10/26/2023 -14.97% Morgan Stanley $332 → $318 Maintains Equal-Weight 10/26/2023 -9.09% Barclays $350 → $340 Maintains Equal-Weight 10/18/2023 1.6% JP Morgan $390 → $380 Maintains Overweight 10/03/2023 -11.23% Morgan Stanley $345 → $332 Maintains Equal-Weight 09/18/2023 8.02% RBC Capital → $404 Reiterates Outperform → Outperform 09/14/2023 4.28% Wolfe Research → $390 Initiates Coverage On → Outperform 07/27/2023 6.68% BMO Capital $390 → $399 Maintains Outperform 07/26/2023 -7.75% Morgan Stanley $323 → $345 Maintains Equal-Weight 07/26/2023 8.02% RBC