Moody’s updates rating methodology for several sectors

Published 03/04/2025, 20:22
© Reuters.

Investing.com -- Moody’s announced on Thursday an update to its rating methodology for sectors including surface transportation and logistics companies, construction companies, packaging manufacturers, and mining companies.

The changes were made to provide greater consistency across the corporation’s sector methodologies. The Profitability and Efficiency factor, for instance, has seen the replacement of Operating Margin and EBITA/Average Assets sub-factors with EBIT Margin. Similarly, the Leverage and Coverage factor has seen the replacement of FFO/Debt and EBIT/Interest Expense sub-factors with RCF/Net Debt and EBITDA/Interest Expense, respectively.

In addition, some factor and sub-factor weights and scoring thresholds have been changed. Limited editorial updates have also been made to some sections of the methodology, and the presentation of the scorecard has been altered.

The update also involved changes to the Scale factor, with EBITA being removed as a sub-factor. The Business Profile factor saw the Expected Revenue & Margin Stability sub-factor renamed as Revenue and Earnings Stability and moved to a new Profitability and Efficiency factor.

Furthermore, the Business Profile factor saw the renaming of the Product Strengths and Differentiation and the Competitive Position sub-factors to Product Portfolio and Market Position, respectively. The Profitability and Efficiency factor saw the replacement of the EBITDA Margin sub-factor with EBIT Margin, and the Leverage and Coverage factor saw the replacement of the FCF/Debt sub-factor with RCF/Net Debt.

Moody’s reassured that these updates will not impact current outstanding ratings.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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