Moody's: Analytics Will Drive Growth

Summary

• Moody's continues its international expansion with the acquisition of one of the four Chilean credit rating agencies.
• After the recovery in equity markets and credit spreads, the lowered guidance presented in April might be outdated.
• Considering the global debt levels, I expect the rating segment to grow more slowly going forward.
• Future growth will be driven by the analytics segment, which has room to expand margins by leveraging AI and automation.
• I estimate a fair price of $464 per share, and given the expected growth rates, Moody's is a hold.

J Studios

Since Moody's (NYSE:MCO) lowered its guidance in late April, a lot has changed. The equity markets have recovered, and the credit spread is back at pre-Liberation Day levels.

The company keeps expanding internationally with the recently announced acquisition in Chile, and

Analyst’s 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.