Moody's Corporation
MCO
$494.71
-1.97%
Moody's Corporation is a leading provider of credit ratings, research, and risk analysis, operating through two primary segments: Moody's Investors Service (MIS), which offers credit ratings on fixed-income securities, and Moody's Analytics, which provides decision solutions, research, and data. As one of the 'Big Three' credit rating agencies alongside S&P Global and Fitch, Moody's holds a duopolistic position in the ratings market, underpinned by regulatory moats and high switching costs. The current investor narrative centers on the resilience of its ratings business amid fluctuating debt issuance volumes, the growth of its Analytics segment as a recurring revenue stream, and the potential impact of AI on its data and analytics offerings. Recent news highlights Moody's as a 'comeback' candidate in 2026, with analysts pointing to its durable competitive advantages and attractive valuation after a period of underperformance relative to the broader market.…
MCO
Moody's Corporation
$494.71
Related headlines
MCO 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Moody's Corporation's 12-month outlook, with a consensus price target around $560.48 and implied upside of +13.3% versus the current price.
Average Target
$560.48
0 analysts
Implied Upside
+13.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$505 - $610
Analyst target range
The target price range spans from a low of $505.00 to a high of $610.00, representing a wide spread of 20.8% from the average, indicating moderate uncertainty about the stock's future performance. The low target of $505.00 is only 1.9% below the current price, suggesting that even the most bearish analyst sees limited downside, likely due to the stock's strong fundamentals and defensive characteristics. The high target of $610.00 implies an upside of 18.5%, which would require continued strong earnings growth and multiple expansion. Recent institutional ratings show a mix of Overweight and Equal Weight/Market Perform ratings, with no recent downgrades, indicating stable sentiment. The wide spread between low and high targets reflects the ongoing debate about the sustainability of Moody's growth in the face of AI disruption and cyclical debt issuance, but the overall consensus remains positive.
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Bulls vs Bears: MCO Investment Factors
Moody's presents a compelling bull case driven by its dominant duopoly position, strong revenue growth, and high profitability, supported by a consensus Buy rating and analyst targets implying upside. However, the elevated valuation, cyclicality of the ratings business, and high debt levels introduce significant risks. The most critical tension is whether Moody's can sustain its growth and margin expansion to justify its premium valuation, particularly as AI disruption looms. Currently, the bull case has stronger evidence given the company's proven resilience and recurring revenue shift, but the stock's valuation leaves limited margin of safety.
Bullish
- Dominant Duopoly Position: Moody's, alongside S&P Global, controls the credit ratings market with regulatory moats and high switching costs, ensuring pricing power and stable demand. This duopoly is reinforced by issuer-pays model and regulatory requirements for ratings in capital markets.
- Strong Revenue Growth: Q1 2026 revenue grew 8.06% YoY to $2.079 billion, with TTM revenue rising from $7.3B in 2024 to $7.9B in 2025, an 8.2% increase. The Analytics segment now contributes 61.2% of revenue, providing a recurring, less cyclical stream.
- High Profitability Metrics: Operating margin stands at 44.8% and net margin at 31.9%, reflecting efficient cost management and scale. Gross margin of 68.2% underscores the asset-light nature of the business, driving strong cash generation.
- Analyst Upside Potential: With a consensus Buy rating and average target of $560.48, the stock offers 8.8% upside from the current price of $514.95. The high target of $610 implies 18.5% upside, while the low target of $505 suggests limited downside of only 1.9%.
Bearish
- Elevated Valuation: Trailing PE of 37.21x and forward PE of 27.23x are at a premium to historical averages, with a PEG ratio of 1.75x indicating the stock is priced above its growth rate. This leaves little room for error if earnings disappoint.
- Cyclicality of Ratings Business: Moody's Investors Service revenue is tied to debt issuance volumes, which are cyclical and sensitive to interest rates and economic conditions. A slowdown in bond markets could significantly impact the ratings segment, which still contributes 38.8% of revenue.
- High Debt Levels: Debt-to-equity ratio of 1.81x is elevated, increasing financial risk and interest expense sensitivity. This leverage could constrain flexibility in a rising rate environment or during an economic downturn.
- AI Disruption Threat: The rise of AI in financial data and analytics could disrupt Moody's traditional moats, as competitors may leverage AI to offer cheaper or more efficient credit risk assessment. This is a key concern highlighted by recent news and could pressure margins over time.
MCO Technical Analysis
Moody's stock has exhibited a strong recovery over the past year, with a 1-year price change of +108.36%, significantly outpacing the S&P 500's +18.56% gain. The current price of $514.95 sits at 94.2% of its 52-week range (between $402.28 low and $546.88 high), indicating the stock is trading near its highs, which reflects robust momentum but also potential overextension. The stock's beta of 1.33 suggests it is 33% more volatile than the market, amplifying both upside and downside moves. The 52-week low of $402.28 was set in March 2026, and the stock has since rallied over 28% from that level, confirming a sustained uptrend.
Beta
1.33
1.33x market volatility
Max Drawdown
-23.6%
Largest decline past year
52-Week Range
$402-$547
Price range past year
Annual Return
-3.0%
Cumulative gain past year
| Period | MCO Return | S&P 500 |
|---|---|---|
| 1m | +3.4% | +2.0% |
| 3m | +10.3% | +1.0% |
| 6m | +5.2% | +11.8% |
| 1y | -3.0% | +18.1% |
| ytd | -0.9% | +11.7% |
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MCO Fundamental Analysis
Moody's revenue growth has been solid, with Q1 2026 revenue of $2.079 billion, up 8.06% year-over-year, and a sequential acceleration from Q4 2025's $1.889 billion. The company's revenue mix is diversified, with Moody's Analytics contributing $1.272 billion (61.2% of total) and Moody's Investors Service contributing $807 million (38.8%), reflecting the growing importance of the Analytics segment. Over the trailing twelve months, revenue has grown from $7.3 billion in 2024 to $7.9 billion in 2025, a 8.2% increase, driven by strong demand for risk analytics and data solutions. The Q1 2026 growth rate of 8.06% is a slight deceleration from the 9.4% growth seen in Q3 2025, but remains healthy and above the industry average for financial data providers.
Quarterly Revenue
$2.1B
2026-03
Revenue YoY Growth
+8.1%
YoY Comparison
Gross Margin
74.5%
Latest Quarter
Free Cash Flow
$3.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is MCO Overvalued?
Given Moody's positive net income, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE stands at 37.21x, while the forward PE is 27.23x, implying the market expects significant earnings growth of approximately 36.6% over the next year. This gap suggests that investors are pricing in a strong recovery in earnings, likely driven by increased debt issuance and margin expansion. The PEG ratio of 1.75x indicates that the stock is trading at a premium to its expected growth rate, which may be justified by Moody's dominant market position and high barriers to entry.
PE
37.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 28x~52x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
24.5x
Enterprise Value Multiple
