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Investing.com - Evercore ISI reduced its price target on MSCI Inc . (NYSE:MSCI) to $588.00 from $631.00 on Tuesday, while maintaining an Outperform rating on the stock. The $41 billion market cap company, which maintains an impressive 82% gross profit margin, currently trades at a P/E ratio of 36.5x.
The price target reduction follows Evercore’s acknowledgment that its original thesis about higher equity markets driving reacceleration in subscription run rate growth has not materialized. According to the firm, MSCI now believes this reacceleration is unlikely to occur in the near term. However, InvestingPro data shows the company has maintained healthy revenue growth of 11.7% over the last twelve months.
The investment research firm cited concerns about MSCI’s growth potential in the traditional asset management segment, which represents approximately 50% of the company’s run rate. This segment is expected to show only mid-single-digit percentage subscription growth that is unlikely to accelerate despite asset flows out of the U.S.
Evercore also expressed concerns about potential market saturation in MSCI’s end markets and the company’s apparent unwillingness to implement additional price increases. The firm noted that subscription run rate yield on assets under management has remained flat since 2022.
These factors have contributed to Evercore’s lower revenue growth outlook for MSCI, though the firm maintained its overall positive view on the stock as reflected in the continued Outperform rating. This aligns with InvestingPro data showing 9 analysts have revised their earnings upwards for the upcoming period, while the company maintains strong dividend growth of 12.5% year-over-year.
In other recent news, MSCI Inc. reported its second-quarter earnings for 2025, surpassing analyst forecasts. The company achieved earnings per share of $4.17, exceeding the expected $4.14. Additionally, MSCI’s revenue reached $772.68 million, outperforming the anticipated $769.56 million. These results highlight MSCI’s strong performance in the quarter. Despite the positive earnings and revenue figures, the company’s stock experienced a decline in pre-market trading. This drop reflects investor concerns about MSCI’s future outlook and current market conditions. The earnings report is a critical update for investors monitoring MSCI’s financial health and market position.
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