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On Tuesday, Stifel analysts adjusted their outlook for Moody’s Corp (NYSE:MCO), reducing the price target from $533.00 to $468.00 while maintaining a Hold rating on the company’s shares. The revision follows Moody’s first-quarter results for 2025, which were described as strong, with the company maintaining impressive gross profit margins of 72.6% and revenue growth of 19.8% over the last twelve months. However, April experienced a downturn in issuance activity due to recent market volatility, prompting Stifel to reassess their expectations for the company. According to InvestingPro data, 12 analysts have recently revised their earnings expectations downward for the upcoming period.
The analysts noted that the challenging conditions in April make it hard to predict future issuance activity. Consequently, Stifel has revised its 2025 estimates for Moody’s downward, anticipating that issuance for the remainder of the year will not meet initial expectations. The new price target represents a recalibration based on current enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) of 25.5x and price-to-earnings (P/E) multiple of 37.8x, now projected into 2026. InvestingPro analysis suggests the stock is trading above its calculated Fair Value, with current metrics showing high multiples relative to near-term earnings growth potential.
Stifel’s analysts highlighted the difficulty in forecasting issuance activity due to the unpredictable nature of the market. This uncertainty has led them to take a more conservative stance on Moody’s financial outlook for the year. The lowered price target is a reflection of this updated perspective, taking into account both 2025 and 2026 estimates.
Despite the reduction in the price target, Stifel’s Hold rating indicates a neutral position on Moody’s stock, suggesting that the analysts do not see significant upside or downside potential at this time. This rating remains unchanged even as the price target has been adjusted to reflect the latest market conditions and company projections.
Investors in Moody’s Corp will likely monitor the company’s performance closely, particularly in relation to issuance trends, as these are key indicators of the company’s financial health and future prospects. The updated target price is now set at $468.00, marking a notable decrease from the previous target but still offering a benchmark for shareholders and potential investors as they evaluate the stock’s value in a fluctuating market.
In other recent news, Moody’s Corporation reported a strong performance for the first quarter of 2025, exceeding earnings expectations. The company announced adjusted earnings per share of $3.83, surpassing the projected $3.56, while revenue reached $1.9 billion, marking an 8% increase from the previous year. Moody’s also launched new AI-powered solutions and acquired Cape Analytics, further enhancing its analytics capabilities. In terms of strategic developments, Moody’s expects full-year revenue growth to be in the mid-single digits, with an adjusted operating margin projected between 49% and 50%.
The company plans to repurchase at least $1.3 billion in shares and anticipates free cash flow between $2.3 billion and $2.5 billion for the year. Notably, Moody’s has been making significant investments in AI and analytics, which have contributed to its robust financial results. Moody’s Analytics achieved quarterly revenue of $859 million, with an 8% growth and recurring revenue increasing by 9%. Additionally, Moody’s partnership with MSCI aims to provide independent risk assessments for private credit investments, reflecting a strategic move to address investor demand for transparency in the private credit market.
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