Raymond James upgrades Moody’s stock rating to Market Perform

Investing.com - Raymond James upgraded Moody’s Corp (NYSE:MCO) from Underperform to Market Perform ahead of the company’s third-quarter 2025 results, due October 22. According to InvestingPro data, the company maintains strong financial health with a "GOOD" overall score.

The upgrade reflects Raymond James’ view that there is "limited further downside risk" to Moody’s valuation multiple, which currently sits near the stock’s five-year average. The stock trades at a P/E ratio of 39.9x and shows a premium to its InvestingPro Fair Value, with 13 analysts recently revising earnings estimates upward.

Strong issuance activity during the quarter is expected to boost Moody’s third-quarter 2025 results, according to the research firm, which expressed increased confidence that the company will achieve the higher end of its full-year revenue and EPS guidance.

Despite the upgrade, Raymond James maintains a below-consensus outlook for Moody’s Investors Service (MIS) revenue and EPS estimates for 2026, citing concerns that "currently tight credit spreads are unsustainable" and uncertainty around the "longer-term impacts of private credit."

The research firm now views the risk/reward profile for Moody’s as "relatively balanced," marking a shift from its previous more negative stance on the stock.

In other recent news, Moody’s Corp has been the focus of several analyst updates. RBC Capital reiterated its Outperform rating, citing the potential for Moody’s to surpass consensus earnings estimates, which could lead to an upward revision of its fiscal year 2025 guidance. Seaport Global Securities initiated coverage with a Buy rating and a $528 price target, emphasizing Moody’s leadership in Credit Rating and Risk Assessment. Deutsche Bank upgraded Moody’s from Hold to Buy, noting significant fundamental upside potential despite high valuations. Additionally, RBC Capital highlighted opportunities in artificial intelligence and private credit growth as reasons for maintaining its Outperform rating. Meanwhile, UBS reiterated a Neutral rating with a $515 price target, following meetings with Moody’s CFO that pointed to strong structural tailwinds and near-term business strength. These developments reflect diverse analyst perspectives on Moody’s future performance.

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