MSCI: The Lofty Valuation Leaves No Room For Errors

Jan. 21, 2023 1:35 AM ETMSCI Inc. (MSCI)BLK7 Comments
Jarco Vianen profile picture
Jarco Vianen
181 Followers

Summary

  • Shares of MSCI Inc. have gained nearly 30% since last year’s October lows, driven by momentum in global markets.
  • This steep increase in share price is unjustified, despite the great business model and financials.
  • I rate MSCI stock a ‘Sell’ as the stock has 37% downside from the current price level, based on a discounted cash flow analysis.

Bear Warning Sign

wildpixel

The investment thesis

MSCI Inc. (NYSE:MSCI) is about to report Q4 FY2022 earnings on January 31st and the stock has gained nearly 30% since the October 2022 lows. The business has significant competitive advantages and it is likely that double-digit

MSCI-linked equity ETF AUM

MSCI-linked equity ETF AUM (MSCI Investor Relations)

Firmwide ESG & Climate Run Rate

Firmwide ESG & Climate Run Rate (MSCI Investor Relations)

Chart
Data by YCharts

Chart
Data by YCharts

Free cash flow versus capital returned for MSCI

Free cash flow versus capital returned for MSCI (MSCI Investor Relations; Author)

MSCI Long-term Targets

MSCI Long-term Targets (MSCI Investor Relations)

DCF inputs

DCF inputs (Seeking Alpha; Author)

DCF outputs

DCF outputs (Author)

This article was written by

Jarco Vianen profile picture
181 Followers
I’m an individual investor who is just sharing his insights to help you in your investment proces.My strategy is to buy high-quality dividend stocks at reasonable prices with the intention to hold them forever. In the proces, I always look for moats – abilities that give a business competitive advantages. I believe moats are essential for a business to generate great long-term returns.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (7)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.