On Wednesday, RBC Capital maintained its Outperform rating on MSCI Inc . (NYSE:MSCI) shares, with a steady price target of $638.00. The firm recognized MSCI's accelerated growth in the second quarter of 2024, highlighting a mid-teens increase in net new recurring subscription sales.
This performance was attributed to a 200 basis points quarter-over-quarter improvement in retention and a 22% rise in new recurring subscription sales. The growth occurred despite constraints such as tight client budgets, longer sales cycles, and a slowdown in fund formation.
MSCI anticipates potential challenges in the near term, including the likelihood of increased cancellations and typically weaker sales in the third quarter of 2024. Nevertheless, the company's effective strategy, consistent pricing, unique product offerings, and long-term industry trends are expected to drive subscription growth to low double digits over the mid-term.
The financial services firm projects that estimates for MSCI may be adjusted upwards and that the stock could experience a re-rating as the company continues to meet targets for net new recurring subscription sales.
InvestingPro Insights
With MSCI Inc. demonstrating robust performance, RBC Capital's optimistic outlook is further supported by current metrics and analyst sentiments as per InvestingPro data. MSCI's market capitalization stands at a solid $42.97 billion, and the company has achieved a high gross profit margin of 82.17% over the last twelve months as of Q1 2024. These figures underscore MSCI's strong financial foundation and operational efficiency.
InvestingPro Tips indicate that MSCI has not only raised its dividend for 11 consecutive years but also has experienced a significant return over the last week, with a 1-week price total return of 8.34%. Moreover, four analysts have revised their earnings upwards for the upcoming period, signaling confidence in the company's continued profitability. For investors looking to delve deeper into MSCI's potential, InvestingPro offers additional tips and insights. There are 10 more InvestingPro Tips available, which can be accessed for a deeper analysis and understanding of MSCI's prospects.
For those interested in leveraging these insights, consider using the coupon code FTSEINVEST to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro. With this subscription, investors can gain a more comprehensive view of MSCI's financial health and future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.