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Investing.com - BMO Capital raised its price target on Moody’s Corp (NYSE:MCO) to $534 from $509 on Friday, while maintaining a Market Perform rating on the stock. The new target represents modest upside from the current price of $513.09, with the stock trading near its 52-week high of $531.93. According to InvestingPro analysis, Moody’s is currently trading above its Fair Value.
The firm cited improved issuance activity that strengthened sequentially following what it described as a "tough April" for the credit ratings company. Moody’s benefited particularly from strength in Private Credit and a favorable mix that included Investment Grade ratings and reduced bank loan repricing. The company’s strong financial health is reflected in its perfect Piotroski Score of 9, with revenue growing at 11.47% over the last twelve months.
BMO Capital noted that Moody’s Analytics (MA) annual recurring revenue (ARR) experienced a slight slowdown, attributing this to the company’s termination of a Know Your Customer (KYC) distribution partnership. The firm indicated that ARR remained stable when excluding this specific factor.
Management has raised the lower end of its 2025 adjusted earnings per share guidance, according to BMO Capital. The company suggested its issuance guidance might be conservative, with "more upside than downside" potential.
The price target increase follows BMO Capital’s decision to raise its earnings estimates for Moody’s based on these developments.
In other recent news, Moody’s Corporation reported its second-quarter 2025 financial results, exceeding Wall Street expectations. The company posted an adjusted earnings per share (EPS) of $3.56, surpassing the forecast of $3.38. Revenue also outperformed predictions, reaching $1.9 billion compared to the anticipated $1.85 billion. Despite these strong financial results, Raymond (NSE:RYMD) James reiterated its Underperform rating on Moody’s. The investment firm maintained its cautious stance, noting a generally healthy quarter for issuance in the credit markets. These developments come amid broader market concerns and potential challenges in the financial sector.
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