On Friday, BMO Capital Markets maintained its Outperform rating on shares of Moody's Corporation (NYSE:MCO), with a consistent price target of $420.00. The rating affirmation came after Moody's reported first quarter results for 2024, which exceeded expectations. The strong performance was attributed to robust debt issuance, marking the second-best revenue quarter for Moody's Investors Service (MIS). Despite a minor deceleration in Moody's Analytics (MA) growth, the company's Annual Recurring Revenue (ARR) saw a 10% increase.
Moody's margin expansion was primarily fueled by the solid results from Moody's Analytics. In response to the first quarter performance, management at Moody's adjusted the company's full-year 2024 guidance. While the lower end of the guidance range was raised, the forecast for Moody's Analytics was revised downward. This adjustment was due to the impact of foreign exchange rates and a slightly slower start to the year than anticipated.
The updated outlook from Moody's suggests that the strong debt issuance observed in the first quarter might have been an acceleration of activity that was expected to occur later in the year. As a result, the company has taken a cautious stance for the remainder of 2024. BMO Capital's analyst noted these changes and accordingly adjusted their estimates for the company's future performance.
Moody's Corporation's financial results and the subsequent guidance update reflect the company's current business environment. The maintenance of the Outperform rating by BMO Capital Markets, along with the unchanged price target, indicates their confidence in the company's ongoing potential despite the revised projections for Moody's Analytics.
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