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On Wednesday, BMO Capital Markets adjusted its outlook on Moody’s Corporation (NYSE:MCO), reducing its price target to $456 from the previous $475, while maintaining a Market Perform rating on the stock. Currently trading at $446 with a market capitalization of $80 billion, InvestingPro analysis suggests the stock is trading above its Fair Value. The adjustment follows Moody’s recent earnings report, where the company surpassed diminished expectations due to a decline in issuance activity. However, Moody’s management revised its 2025 issuance guidance downward, citing a slowdown in April that is anticipated to resolve later in the year.
The revision in guidance also affected Moody’s Analytics (MA), particularly in the Data and Information segment, leading to an adjusted annual recurring revenue (ARR) forecast at the lower end of the previous range. BMO Capital’s analyst noted that the market’s tepid response to the news suggests that the downward revision had been anticipated by investors, as intraquarter issuance data had already hinted at a potential slowdown.
In the report, BMO Capital mentioned that despite the beat on lowered expectations, the need to revise estimates and targets was driven by the changes in Moody’s guidance and market conditions. The firm’s analysis reflects a cautious stance on Moody’s stock, acknowledging the challenges faced by the company in the current financial climate.
The price target reduction is a direct result of the updated guidance from Moody’s management and the observed market dynamics. BMO Capital aims to align its expectations with the company’s forecast and the broader market sentiment, which has been affected by the slower issuance activity and adjustments in the Data and Information driven segments of Moody’s Analytics.
Moody’s Corporation, headquartered in New York City, is a well-known global provider of credit ratings, research, tools, and analysis that contribute to transparent and integrated financial markets. The company maintains strong financial health with a 72.6% gross profit margin and has raised its dividend for 15 consecutive years. InvestingPro subscribers can access 8 additional ProTips and a comprehensive analysis of Moody’s financial metrics through the platform’s exclusive Pro Research Report, available for over 1,400 top US stocks.
In other recent news, Moody’s Corporation reported strong first-quarter 2025 results, exceeding earnings expectations. The company posted an adjusted earnings per share (EPS) of $3.83, surpassing the forecast of $3.56, and achieved a revenue of $1.9 billion, marking an 8% increase from the previous year. Despite this robust performance, Moody’s has revised its full-year 2025 guidance downward, citing lower GDP growth forecasts and market volatility. In response, Oppenheimer maintained an Outperform rating on Moody’s but lowered its price target to $489, while Stifel adjusted its price target to $468, maintaining a Hold rating.
Moody’s launched new AI-powered solutions and acquired Cape Analytics, further strengthening its position in the analytics sector. The company’s strategic investments in AI and analytics contributed to its strong financial results, with Moody’s Analytics revenue rising by 8%. The broader economic landscape remains uncertain, prompting Moody’s to offer a wider guidance range for the year. Despite these challenges, the company continues to focus on strategic growth areas, including private credit and structured finance, which have shown significant contributions to its revenue growth.
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