Street Calls of the Week
Investing.com - UBS has reiterated its Neutral rating on Moody’s Corp (NYSE:MCO) with a price target of $515.00 following investor meetings with the company’s CFO, Noémie Heuland. According to InvestingPro data, Moody’s currently trades at a P/E ratio of 43x and maintains strong financial health with a "GOOD" overall score.
The meetings conveyed a generally positive tone, with Moody’s highlighting both strong structural tailwinds and near-term strength across its business segments, according to UBS.
In the Ratings division, third-quarter issuance trends suggest potential upside to earnings, while growing financing demands support the long-term outlook for this segment of Moody’s business.
For the Analytics division, artificial intelligence disruption emerged as a significant topic during discussions, but UBS notes that Moody’s appears well positioned given the mostly proprietary nature of its data, with growing scale and key initiatives expected to support margin expansion in this segment.
While UBS expressed fundamental positivity about the Moody’s franchise and sees potential for positive upside revisions, the firm indicated that Moody’s current valuation sits at a significant premium to peers, leading UBS to suggest waiting for a better entry point before taking a more bullish stance.
In other recent news, Moody’s Corporation announced plans to acquire a majority stake in Middle East Rating & Investors Service (MERIS), a credit rating agency in Egypt. This move is pending regulatory approval and aims to strengthen the partnership that began in 2003 between Moody’s and FinBi. In leadership changes, Stephen Tulenko resigned as President of Moody’s Analytics to pursue another opportunity, effective September 2, 2025. Andy Frepp has been appointed as the Interim President of Moody’s Analytics, while the company conducts a search for a permanent replacement.
BMO Capital has maintained its Market Perform rating on Moody’s, raising the stock price target to $534 from $509. The adjustment reflects improved issuance activity, especially in Private Credit and Investment Grade ratings. Meanwhile, Raymond James reiterated its Underperform rating on Moody’s, despite acknowledging a generally healthy quarter for credit market issuance. These developments underscore Moody’s ongoing strategic and operational shifts.
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