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Moody's
(NYSE:MCO)
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Rating:77Outperform
Price Target:
$550.00
▲(16.65% Upside)
Action:Reiterated
Date:08/17/26
The score is driven primarily by strong financial performance—high margins and robust, improving free cash flow—reinforced by a positive earnings update with raised EPS/FCF targets and solid MIS/MA operating momentum. These strengths are tempered by balance-sheet leverage and a relatively expensive valuation (high P/E with a low dividend yield), while technicals are supportive but not especially strong.
Positive Factors
Recurring Analytics Growth
High retention and recurring revenue give Moody’s Analytics visibility and resilience beyond debt issuance cycles. Continued ARR growth indicates sustained customer demand for risk, compliance, and decisioning tools across financial institutions.
Negative Factors
Balance Sheet Leverage
Meaningful leverage and a thinner equity base increase financial risk relative to conservatively capitalized peers. Although cash generation is strong, elevated debt can reduce flexibility if capital-markets activity weakens or operating conditions deteriorate.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Analytics Growth
High retention and recurring revenue give Moody’s Analytics visibility and resilience beyond debt issuance cycles. Continued ARR growth indicates sustained customer demand for risk, compliance, and decisioning tools across financial institutions.
Read all positive factors
Moody's Key Performance Indicators (KPIs)
Any
Revenue by Geography
Revenue split across regions (U.S., EMEA, APAC) reveals where Moody’s earns most and how exposed it is to local credit cycles, regulatory environments, and regional growth opportunities.
Revenue split across regions (U.S., EMEA, APAC) reveals where Moody’s earns most and how exposed it is to local credit cycles, regulatory environments, and regional growth opportunities.
Data provided by:
The Fly
The FlyMoody's (MCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$88.57B
Dividend Yield0.78%
Average Volume (3M)1.01M
Price to Earnings (P/E)32.4
Beta (1Y)1.06
Revenue Growth11.67%
EPS Growth33.94%
CountryUS
Employees16,000
SectorFinancial
Sector Strength70
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)15.81
Shares Outstanding173,200,000
10 Day Avg. Volume978,729
30 Day Avg. Volume1,006,311
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$564.00Price Target Upside19.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
EPS Forecast (FY)16.95
Revenue Forecast (FY)$8.28B
Moody's Business Overview & Revenue Model
Company Description
Moody's Corporation operates as a global leader in risk assessment, divided into two main segments: Moody's Investors Service and Moody's Analytics. Moody's Investors Service is dedicated to issuing credit ratings and providing detailed assessment...
How the Company Makes Money
Moody’s makes money mainly through two operating segments:
1) Moody’s Investors Service (MIS) – credit ratings and related services
- Issuer-paid ratings fees: The largest component is typically fees paid by debt issuers (e.g., corporations, fina...
Moody's Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 27, 2026
Earnings Call Sentiment Positive
The call presented a strong set of operational and financial results: robust top-line and bottom-line growth, substantial margin expansion, ARR and recurring revenue momentum, significant free cash flow and accelerated capital return commitments, plus notable product wins and strategic partnerships. Management qualified the quarter's upside by noting a revenue-mix effect (more issuance in lower-yield segments) and maintained conservative near-term revenue cadence and guidance, while expanding a restructuring program that creates short-term costs for longer-term savings. Overall the positives — broad-based growth across MIS and MA, margin and cash-flow strength, and clear go-to-market and AI integration momentum — materially outweigh the headwinds related to mix, migration execution, and conservative H2 cadence.Positive Updates
Strong Enterprise Financial Performance
Revenue grew 15% year over year; adjusted operating income increased 25%; adjusted operating margin expanded 440 basis points to 55.3%; adjusted diluted EPS rose 31% to $4.68 for the quarter. Full-year adjusted diluted EPS range midpoint raised to $16.75 (guidance updated to $16.50–$17.00).
Negative Updates
Issuance Mix Dilutes Revenue Conversion
Though rated issuance was higher than expected, the incremental volume was weighted to data-center/hyperscaler and frequent issuer transactions that tend to carry lower average revenue yields; as a result, MIS raised issuance outlook but held MIS revenue guidance steady.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Enterprise Financial Performance
Revenue grew 15% year over year; adjusted operating income increased 25%; adjusted operating margin expanded 440 basis points to 55.3%; adjusted diluted EPS rose 31% to $4.68 for the quarter. Full-year adjusted diluted EPS range midpoint raised to $16.75 (guidance updated to $16.50–$17.00).
Read all positive updates
Company Guidance
The company raised select full‑year targets, upgrading rated‑issuance expectations to mid‑single‑digit percent growth while maintaining MIS revenue and MA ARR guidance in the high‑single‑digit range; adjusted diluted EPS guidance is now $16.50–$17.00 (midpoint $16.75, ~12% growth at midpoint), tax rate expected toward the high end of 23%–25%, and free cash flow guidance was increased to $2.7–$2.9 billion (Q2 FCF $688M, +47% YoY). Management expanded the restructuring envelope by $100M through year‑end 2027 targeting $300M–$350M of annualized savings, raised share repurchase authorization to up to $3.0 billion for 2026 (YTD repurchases ~$2.2B) and expects to return >130% of free cash flow this year; key operating metrics include Q2 enterprise revenue +15%, adjusted operating margin 55.3%, adjusted operating income +25%, MIS issuance >$2T (Q2, +33% YoY, +20% YTD) with MIS margin 68.3%, MA ARR ~ $3.7B (+~9% YoY) with 95% trailing‑12‑month retention and MA margin 33.6%.Moody's Financial Statement Overview
Summary
Income Statement
88
Very Positive
Balance Sheet
64
Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.16B | 7.72B | 7.09B | 5.92B | 5.47B | 6.22B |
| Gross Profit | 5.87B | 5.26B | 4.71B | 3.85B | 3.52B | 4.32B |
| EBITDA | 4.00B | 3.94B | 3.33B | 2.52B | 2.31B | 3.25B |
| Net Income | 2.79B | 2.46B | 2.06B | 1.61B | 1.37B | 2.21B |
Balance Sheet | ||||||
| Total Assets | 14.68B | 15.83B | 15.51B | 14.62B | 14.35B | 14.68B |
| Cash, Cash Equivalents and Short-Term Investments | 1.50B | 2.45B | 2.97B | 2.19B | 1.86B | 1.90B |
| Total Debt | 7.52B | 7.35B | 7.75B | 7.42B | 7.86B | 7.97B |
| Total Liabilities | 11.51B | 11.63B | 11.78B | 11.15B | 11.66B | 11.76B |
| Stockholders Equity | 3.02B | 4.05B | 3.56B | 3.32B | 2.52B | 2.73B |
Cash Flow | ||||||
| Free Cash Flow | 3.40B | 2.58B | 2.52B | 1.88B | 1.19B | 1.87B |
| Operating Cash Flow | 3.32B | 2.90B | 2.84B | 2.15B | 1.47B | 2.00B |
| Investing Cash Flow | -75.00M | 2.00M | -1.06B | -247.00M | -262.00M | -2.62B |
| Financing Cash Flow | -2.38B | -3.06B | -1.45B | -1.58B | -1.21B | -122.00M |
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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $10.86B | 19.99 | 26.58% | 1.75% | 6.62% | 8.75% | |
81 Outperform | $8.16B | 20.26 | 35.29% | 1.13% | 9.33% | 12.16% | |
79 Outperform | $128.36B | 26.50 | 15.47% | 0.86% | 9.67% | 26.18% | |
77 Outperform | $88.57B | 32.36 | 79.69% | 0.84% | 11.67% | 33.94% | |
74 Outperform | $16.26B | 22.16 | 18.32% | 0.63% | 12.37% | 90.36% | |
69 Neutral | $41.54B | 31.43 | -54.14% | 1.40% | 11.62% | 21.00% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
MCO
Moody's
513.11
7.43
1.47%
FDS
Factset Research
296.08
-77.76
-20.80%
SPGI
S&P Global
432.99
-83.68
-16.20%
MORN
Morningstar
215.01
-47.44
-18.08%
MSCI
MSCI
563.99
1.91
0.34%
TRU
TransUnion
85.01
-3.49
-3.95%
Moody's Corporate Events
Business Operations and StrategyExecutive/Board Changes
Moody’s Adds Insurance Leader Keith Demmings to Board
Positive
Aug 12, 2026
On August 12, 2026, Moody’s Corporation announced the election of Keith Demmings, President and Chief Executive Officer of Assurant, Inc., to its Board of Directors, effective November 1, 2026. Demmings, who has nearly 30 years of leadership...
Business Operations and StrategyStock BuybackFinancial Disclosures
Moody’s posts strong Q2 results, raises buyback plans
Positive
Jul 22, 2026
Moody’s Corporation reported strong second-quarter 2026 results on July 22, 2026, with revenue rising 15% year-on-year to $2.19 billion and operating margin expanding to 47.9%. Diluted EPS jumped 57% while adjusted diluted EPS increased 31%,...
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.