On Monday, BMO Capital Markets adjusted its outlook on Morningstar stock (NASDAQ:MORN), reducing the price target from $387.00 to $370.00, while maintaining an Outperform rating. With the stock currently trading at $314.52 and analyst targets ranging from $355 to $390, InvestingPro analysis suggests the stock is trading above its Fair Value. The revision followed the company’s fourth-quarter 2024 earnings, which surpassed consensus expectations largely due to the strong performance of its Credit segment. Revenue growth and margin expansion were observed to be better than anticipated across most of Morningstar’s operating segments. However, the Data & Analytics division experienced slower growth and margin contraction, influenced by a recent divestiture.
Morningstar’s management continues to prioritize margin improvement, which BMO Capital views as a central element of the company’s investment appeal. In response to the recent financial results and strategic moves by Morningstar, BMO Capital has updated its estimates and target price, taking into account the impact of the company’s latest divestitures and revised projections for the year 2026.
The company also embarked on share repurchases, buying back approximately $12 million worth of its shares in the fourth quarter of 2024. While this buyback represents a modest portion of Morningstar’s capital allocation, it is notable as it marks the first such activity since the second quarter of 2023. Morningstar still has approximately $487 million available for share repurchases under the current authorization, which remains valid until December 31, 2025. The company has maintained dividend payments for 16 consecutive years, demonstrating its commitment to shareholder returns. For deeper insights into Morningstar’s financial metrics and 8 additional ProTips, visit InvestingPro.
BMO Capital’s revised estimates and price target reflect their updated expectations for Morningstar’s financial performance, incorporating the company’s recent divestitures and the anticipated earnings for the year 2026.
In other recent news, Morningstar, Inc. has announced a strategic partnership with SS&C Technologies, integrating its Direct Advisory Suite with SS&C’s Black Diamond (NASDAQ:CLAR) Wealth Platform. This collaboration aims to enhance advisor productivity by providing advanced investment planning and reporting capabilities directly within existing workflows. In a separate development, Morningstar disclosed a new SEC filing that addresses investor queries up to December 31, 2024. This filing, which includes forward-looking statements, underscores the company’s commitment to transparency while highlighting potential risks such as cybersecurity threats and regulatory changes.
Additionally, Morningstar has appointed Michael Holt as the new Chief Financial Officer, effective January 1, 2025. Holt, who joined the company in 2008, will succeed Jason Dubinsky, who is transitioning to a consulting role. Holt’s extensive experience in strategic leadership roles, including his recent position as chief strategy officer, is expected to support Morningstar’s ongoing growth. The company emphasizes Holt’s focus on value creation and financial accountability.
These recent developments reflect Morningstar’s strategic initiatives in both technological integration and leadership transition. Investors are encouraged to review further disclosures in Morningstar’s SEC filings for updates on these changes and associated risks.
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