Stifel Nicolaus Issues Pessimistic Forecast for Moody's (NYSE:MCO) Stock Price

Key Points

• Stifel Nicolaus lowered its Moody’s price target from $550 to $537 but maintained a “buy” rating, implying about 11.78% upside from the stock’s $480.40 price. Analysts overall rate MCO a “Moderate Buy,” with an average target of $550.47.
• Moody’s latest quarter fell short of expectations: EPS was $4.14 versus a $4.25 consensus, while revenue reached $2.02 billion compared with estimates of $2.08 billion. Revenue grew just 0.8% year over year, raising concerns about near-term growth.
• The company remains highly profitable, with a 34.25% net margin and 80.35% return on equity, while institutional investors own 92.11% of its shares. However, its approximately 30.5 P/E ratio leaves the stock vulnerable if earnings growth does not accelerate.

Moody's (NYSE:MCO - Get Free Report) had its price objective reduced by investment analysts at Stifel Nicolaus from $550.00 to $537.00 in a research note issued on Thursday, Benzinga reports. The firm currently has a "buy" rating on the business services provider's stock. Stifel Nicolaus' price objective would suggest a potential upside of 11.78% from the stock's current price.

MCO has been the topic of several other research reports. Rothschild & Co Redburn raised their target price on shares of Moody's from $510.00 to $520.00 and gave the stock a "neutral" rating in a report on Thursday, July 23rd. Daiwa Securities Group boosted their target price on shares of Moody's from $500.00 to $535.00 and gave the company an "outperform" rating in a research note on Tuesday, August 4th. Robert W. Baird increased their price target on Moody's from $557.00 to $572.00 and gave the company an "outperform" rating in a report on Thursday, July 23rd. Jefferies Financial Group cut Moody's to a "neutral" rating and set a $560.00 price target on the stock. in a report on Friday, October 16th. Finally, JPMorgan Chase & Co. dropped their price target on Moody's from $570.00 to $555.00 and set an "overweight" rating on the stock in a research note on Wednesday, October 14th. Thirteen investment analysts have rated the stock with a Buy rating and seven have given a Hold rating to the company. According to data from MarketBeat.com, Moody's presently has an average rating of "Moderate Buy" and an average target price of $550.47.

Moody's Stock Up 1.1%

MCO stock opened at $480.40 on Thursday. The stock has a market capitalization of $83.20 billion, a P/E ratio of 30.46, a P/E/G ratio of 2.45 and a beta of 1.35. The company has a debt-to-equity ratio of 2.01, a current ratio of 1.19 and a quick ratio of 1.19. Moody's has a 1-year low of $402.28 and a 1-year high of $546.88. The business has a fifty day moving average price of $478.05 and a 200-day moving average price of $467.75.

Moody's (NYSE:MCO - Get Free Report) last released its quarterly earnings data on Wednesday, October 21st. The business services provider reported $4.14 EPS for the quarter, missing the consensus estimate of $4.25 by ($0.11). Moody's had a net margin of 34.25% and a return on equity of 80.35%. The business had revenue of $2.02 billion for the quarter, compared to analysts' expectations of $2.08 billion. During the same period last year, the business earned $3.92 earnings per share. The company's quarterly revenue was up .8% on a year-over-year basis. Equities analysts forecast that Moody's will post 16.92 earnings per share for the current fiscal year.

Insider Buying and Selling at Moody's

In related news, CEO Robert Fauber sold 1,467 shares of the firm's stock in a transaction that occurred on Monday, August 3rd. The shares were sold at an average price of $484.30, for a total value of $710,468.10. Following the transaction, the chief executive officer owned 51,964 shares of the company's stock, valued at approximately $25,166,165.20. This trade represents a 2.75% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 0.14% of the stock is owned by company insiders.

Institutional Trading of Moody's

Several large investors have recently added to or reduced their stakes in the business. Bank of New York Mellon Corp boosted its stake in shares of Moody's by 3.2% during the 1st quarter. Bank of New York Mellon Corp now owns 2,349,281 shares of the business services provider's stock worth $1,024,874,000 after acquiring an additional 72,043 shares during the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC increased its stake in shares of Moody's by 2.4% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 1,420,099 shares of the business services provider's stock worth $643,191,000 after purchasing an additional 33,024 shares in the last quarter. Principal Financial Group Inc. increased its stake in shares of Moody's by 72.5% in the 1st quarter. Principal Financial Group Inc. now owns 1,081,807 shares of the business services provider's stock worth $471,963,000 after purchasing an additional 454,684 shares in the last quarter. Amundi increased its stake in shares of Moody's by 20.0% in the 2nd quarter. Amundi now owns 1,011,495 shares of the business services provider's stock worth $458,126,000 after purchasing an additional 168,528 shares in the last quarter. Finally, Dimensional Fund Advisors LP raised its holdings in Moody's by 7.2% in the 1st quarter. Dimensional Fund Advisors LP now owns 882,973 shares of the business services provider's stock worth $385,188,000 after purchasing an additional 59,121 shares during the period. 92.11% of the stock is currently owned by institutional investors.

Trending Headlines about Moody's

Here are the key news stories impacting Moody's this week:

• Positive Sentiment: AI infrastructure issuance increased fourfold year over year in the third quarter, and refinancing needs across the U.S. and Europe, the Middle East and Africa exceed $5 trillion. These trends could support future debt-rating and data-services demand. Moody's: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Moody’s declared a quarterly dividend of $1.03 per share, or $4.12 annualized, payable December 11 to shareholders of record November 20. The dividend yield is approximately 0.9%, providing a modest shareholder-return benefit.
• Positive Sentiment: Third-quarter adjusted earnings rose to $4.14 per share from $3.92 a year earlier, while demand for analytics remained steady. The company also maintains strong profitability, including a reported 34.25% net margin and 80.35% return on equity. MCO Q3 Earnings Miss Estimates as Costs Rise & MIS Revenues Fall
• Neutral Sentiment: Moody’s Ratings raised OYO parent PRISM’s outlook to positive, citing expected EBITDA growth. The development may support Moody’s credit-rating activity, but its direct effect on MCO is likely limited. OYO-parent PRISM IPO Article
• Negative Sentiment: Third-quarter adjusted EPS of $4.14 missed the $4.25 consensus estimate, and revenue of $2.02 billion fell short of the $2.08 billion forecast. Revenue increased only 0.8% year over year, while rising costs and weaker MIS revenue added to concerns about near-term growth. Moody's Misses Q3 Earnings and Revenue Estimates
• Negative Sentiment: One valuation analysis argues that MCO’s exceptional business quality is already reflected in its approximately 30-times P/E ratio, making the stock vulnerable to further weakness if growth does not accelerate. Moody's Valuation Analysis

About Moody's

Moody's Corporation NYSE: MCO is a global provider of credit ratings, research, data, analytics and risk-management solutions. Through Moody's Investors Service, the company assigns credit ratings and publishes research on corporate, government and structured-finance debt issuers, helping investors and other market participants evaluate credit risk.

Through Moody's Analytics, the company provides financial intelligence, economic research, data, software and advisory services. Its offerings support credit analysis, lending, portfolio management, enterprise risk management, compliance and related functions across financial institutions, corporations, governments and other organizations.

Moody's traces its origins to 1909, when John Moody established the company that introduced published credit ratings for bonds.

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