Moody's (MCO)
NYSE:MCO
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Moody's
(NYSE:MCO)
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Rating:71Outperform
Price Target:
$498.00
▲(13.28% Upside)
Action:ReiteratedDate:02/19/26
The score is driven primarily by strong financial performance (high margins and cash flow) and an upbeat earnings call with margin/EPS/FCF growth guidance and shareholder returns. This is partially offset by weak technicals (downtrend and bearish momentum) and a premium valuation with a modest dividend yield.
Positive Factors
Free Cash Flow Strength
Consistent, high free cash flow (~$2.9B in 2025) provides durable financial flexibility. It funds buybacks, a rising dividend, and strategic reinvestment (AI, product development, modest CapEx), supporting shareholder returns while enabling execution through economic cycles.
Negative Factors
Elevated Leverage
Leverage remains elevated (~1.8x), limiting financial flexibility and increasing sensitivity to higher interest rates or credit-market stress. Elevated debt can constrain opportunistic M&A, ratchet up funding costs, and force tougher capital-allocation tradeoffs in downturns.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Consistent, high free cash flow (~$2.9B in 2025) provides durable financial flexibility. It funds buybacks, a rising dividend, and strategic reinvestment (AI, product development, modest CapEx), supporting shareholder returns while enabling execution through economic cycles.
Read all positive factors
Moody's (MCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$75.78B
Dividend Yield0.73%
Average Volume (3M)1.24M
Price to Earnings (P/E)37.2
Beta (1Y)1.05
Revenue Growth8.77%
EPS Growth13.62%
CountryUS
Employees15,795
SectorFinancial
Sector Strength70
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)3.64
Shares Outstanding177,300,000
10 Day Avg. Volume780,585
30 Day Avg. Volume1,235,575
Financial Highlights & Ratios
PEG Ratio1.75
Price to Book (P/B)22.57
Price to Sales (P/S)11.85
P/FCF Ratio35.53
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue10.71
Enterprise Value/Gross Profit15.71
Enterprise Value/Ebitda21.24
Forecast
1Y Price Target
$543.64Price Target Upside23.66% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)16.73
Revenue Forecast (FY)$8.29B
Moody's Business Overview & Revenue Model
Company Description
Moody's Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody's Investors Service and Moody's Analytics. The Moody's Investors Service segment publishes credit ratings and provides assessment serv...
How the Company Makes Money
Moody's generates revenue primarily through two key segments: Moody's Investors Service and Moody's Analytics. In the MIS segment, the company earns money by providing credit ratings and research services to a diverse range of clients including co...
Moody's Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyMoody's Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operating and financial picture: record revenue, expanded margins, record adjusted EPS, high issuance and ratings activity, robust private credit growth, growing ARR and recurring revenue, meaningful AI-led customer adoption, and a shareholder-friendly capital return plan. Near-term headwinds—divestitures (creating one‑time and recurring reported growth impacts), some DOS-related cancellations, segment variability (KYC/insurance), FX/M&A timing effects, increased CapEx, and investor questions about widespread AI monetization—were acknowledged but positioned as manageable and largely offset by durable demand, strong cash flow, and strategic positioning. Overall, highlights materially outweigh the lowlights.Positive Updates
Record Revenue and Top-Line Growth
Total revenue exceeded $7,700,000,000 in 2025, up 9% year-over-year; both Ratings and Analytics grew ~9%.
Negative Updates
Early-2025 Tariff-Driven Market Disruption
Management cited a tariff-driven market 'air pocket' early in 2025 that temporarily disrupted activity before recovery later in the year.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Revenue and Top-Line Growth
Total revenue exceeded $7,700,000,000 in 2025, up 9% year-over-year; both Ratings and Analytics grew ~9%.
Read all positive updates
Company Guidance
Moody’s 2026 guidance calls for company revenue growth in the high single‑digit percent range and adjusted operating margin expanding about 150 basis points to roughly 50%–53%, with adjusted diluted EPS of $16.40–$17.00 (≈12% growth at the midpoint), an effective tax rate of 23%–25%, and free cash flow of $2.8–$3.0 billion (≈13% growth at the midpoint) despite a $100 million incremental CapEx build‑out; the firm expects ≈$2.0 billion of share repurchases, a 10% increase to the quarterly dividend and to return at least 90% of FCF to shareholders. On the ratings side (MIS) Moody’s expects issuance to rise low single‑digits (front‑loaded with ~mid‑50% of issuance in H1), a 40%–45% increase in debt‑funded M&A issuance, MIS revenue growth in the high single‑digits and a MIS adjusted operating margin of ~65% (up ~150 bps). Moody’s Analytics guidance is at the high end of mid‑single‑digit reported revenue growth with organic/ARR growth targeted in the high single‑digits, an MA adjusted operating margin of 34%–35% (≈150 bps improvement at midpoint) and a ~180 bps growth headwind from the Learning Solutions divestiture; the Learning Solutions sale produces about a 1 percentage‑point headwind to MCO revenue (≈2 points to MA) and ~30 bps MA margin dilution, while the pending Regulatory Reporting divestiture (upon close) is expected to subtract ~2 percentage points from MA reported revenue and have a modest $0.05–$0.10 EPS impact.Moody's Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
62
Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 7.72B | 7.09B | 5.92B | 5.47B | 6.22B |
| Gross Profit | 5.26B | 4.71B | 3.85B | 3.52B | 4.32B |
| EBITDA | 3.94B | 3.33B | 2.52B | 2.31B | 3.25B |
| Net Income | 2.46B | 2.06B | 1.61B | 1.37B | 2.21B |
Balance Sheet | |||||
| Total Assets | 15.83B | 15.51B | 14.62B | 14.35B | 14.68B |
| Cash, Cash Equivalents and Short-Term Investments | 2.45B | 2.97B | 2.19B | 1.86B | 1.90B |
| Total Debt | 7.35B | 7.75B | 7.42B | 7.86B | 7.97B |
| Total Liabilities | 11.63B | 11.78B | 11.15B | 11.66B | 11.76B |
| Stockholders Equity | 4.05B | 3.56B | 3.32B | 2.52B | 2.73B |
Cash Flow | |||||
| Free Cash Flow | 2.58B | 2.52B | 1.88B | 1.19B | 1.87B |
| Operating Cash Flow | 2.90B | 2.84B | 2.15B | 1.47B | 2.00B |
| Investing Cash Flow | 2.00M | -1.06B | -247.00M | -262.00M | -2.62B |
| Financing Cash Flow | -3.06B | -1.45B | -1.58B | -1.21B | -122.00M |
Moody's Technical Analysis
Neutral
439.61
Price Trends
446.81
Negative
475.71
Negative
485.07
Negative
Market Momentum
-3.78
Negative
48.76
Neutral
36.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCO, the sentiment is Neutral. The current price of 439.61 is above the 20-day moving average (MA) of 436.04, below the 50-day MA of 446.81, and below the 200-day MA of 485.07, indicating a neutral trend. The MACD of -3.78 indicates Negative momentum. The RSI at 48.76 is Neutral, neither overbought nor oversold. The STOCH value of 36.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MCO.
Moody's Risk Analysis
Moody's disclosed 18 risk factors in its most recent earnings report. Moody's reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Moody's Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.71B | 15.04 | 27.22% | 1.49% | 5.88% | 12.18% | |
76 Outperform | $39.23B | 36.82 | -74.96% | 1.24% | 9.02% | 3.45% | |
71 Outperform | $75.78B | 37.25 | 62.81% | 0.73% | 8.77% | 13.62% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $124.13B | 34.77 | 13.62% | 0.73% | 9.04% | 21.35% | |
61 Neutral | $6.65B | 24.33 | 25.12% | 0.84% | 7.76% | 15.92% |
* Financial Sector Average
MCO
Moody's
439.61
7.97
1.85%
FDS
Factset Research
226.42
-203.57
-47.34%
SPGI
S&P Global
430.08
-36.93
-7.91%
MORN
Morningstar
176.42
-105.33
-37.38%
MSCI
MSCI
552.75
3.59
0.65%
Moody's Corporate Events
Business Operations and StrategyFinancial Disclosures
Moody’s Reports Record 2025 Results and Growth Outlook
Positive
Feb 18, 2026
Moody’s Corporation reported that in the fourth quarter of 2025 revenue rose 13% year on year to $1.9 billion, while full-year 2025 revenue increased 9% to a record $7.7 billion, with foreign exchange providing a modest tailwind. Diluted ear...
Executive/Board Changes
Moody’s appoints Lisa Sawicki to board of directors
Positive
Jan 12, 2026
On January 12, 2026, Moody’s Corporation announced that Lisa P. Sawicki, a veteran audit and advisory professional with more than 35 years of experience in financial services, has been elected to its Board of Directors effective March 16, 20...
Business Operations and StrategyRegulatory Filings and Compliance
Moody’s Tightens Retirement Rules in Amended Equity Plan
Neutral
Dec 19, 2025
On December 16, 2025, Moody’s Corporation’s board approved amendments to its 2001 Key Employees’ Stock Incentive Plan, tightening and clarifying conditions under which employees receive favorable “Retirement” treatmen...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.