BMO maintains Moody’s stock Market Perform rating, $531 target

Published 12/03/2025, 16:04
BMO maintains Moody’s stock Market Perform rating, $531 target

On Wednesday, BMO Capital Markets maintained its Market Perform rating on Moody’s Corporation (NYSE:MCO) shares with an unchanged price target of $531.00. According to InvestingPro data, the stock has experienced a notable 7.95% decline over the past week, with current valuation metrics showing a P/E ratio of 38.92x. The stock is currently trading above its Fair Value based on comprehensive analysis. BMO’s analyst highlighted the solid secular drivers for Moody’s Investor Services (MIS) and shared insights from a recent investor call with Michael West, President of MIS, and Shivani Kak, Head of Investor Relations.

During the call, the focus was on MIS’s strategy to sustain growth momentum after a strong performance in 2024. The company’s confidence appears well-founded, with InvestingPro data showing impressive revenue growth of 19.81% and a robust gross profit margin of 72.56%. Despite challenging comparisons, management remains confident in the division’s growth prospects, citing potential variables such as mergers and acquisitions, spread fluctuations, and private credit-related activities. Eight analysts have recently revised their earnings estimates upward for the upcoming period.

Debt issuance has seen fluctuations over the past few years, with record highs in 2020 and 2021 due to low interest rates and economic stimulus measures, followed by a decline in 2022. However, debt issuance saw a recovery in 2023 and continued to improve in 2024. Moody’s management pointed to long-term secular trends supporting the industry, including increased maturity walls since 2024, revenue opportunities in private credit as these instruments are restructured and securitized, transition finance such as energy transition projects, financing for digital infrastructure including data centers, and growth in emerging markets.

These factors are expected to provide a backdrop for MIS’s strategic initiatives and potential growth areas, as the company navigates through various market conditions. The BMO analyst’s reiteration of the Market Perform rating and price target reflects a steady outlook for Moody’s stock, taking into account the company’s recent performance and management’s expectations for the future. Notably, Moody’s has maintained dividend payments for 28 consecutive years and has raised its dividend for 15 straight years, demonstrating consistent shareholder returns. For deeper insights into Moody’s financial health and growth prospects, including 10+ additional ProTips and comprehensive valuation analysis, check out the full research report available on InvestingPro.

In other recent news, Moody’s Corporation has been the focus of several significant developments. BMO Capital Markets increased its price target for Moody’s from $481 to $531, citing strong quarterly performance and optimistic guidance for 2025. This adjustment reflects Moody’s recent financial results, which exceeded expectations due to robust profit margins and a strategic restructuring initiative aimed at enhancing growth prospects. Meanwhile, RBC Capital Markets maintained an Outperform rating with a $550 target, noting challenges in Market Intelligence Services revenues but expressing confidence in Moody’s long-term potential. Mizuho (NYSE:MFG) initiated coverage with a Neutral rating and a $504 target, highlighting Moody’s strong competitive position and potential for profitability through technology investments. Additionally, Moody’s announced an executive transition, with Jason Phillips set to replace Caroline Sullivan as Chief Accounting Officer and Controller, ensuring a smooth leadership change. These developments underscore Moody’s ongoing efforts to navigate market challenges and capitalize on growth opportunities.

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