Moody's Corporation
MCO
$0.00
+0.46%
Moody's Corporation is a leading provider of credit ratings and financial intelligence, operating in the Financial - Data & Stock Exchanges industry. It is defined by its dominant duopoly position in credit ratings alongside S&P, with a core narrative built on essential, high-margin analytics and ratings services for global capital markets.…
MCO
Moody's Corporation
$0.00
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Investment Opinion: Should I buy MCO Today?
Based on a synthesis of the data, the objective assessment for MCO is a Hold. The company's exceptional fundamentals, including a 32.3% net margin and a dominant market position, are compelling long-term strengths. However, these are currently offset by a premium valuation (trailing P/E of 37.2) and clear near-term headwinds evidenced by significant price deterioration and high leverage. Investors may find better entry points, making an immediate Buy recommendation less favorable despite the strong underlying business.
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MCO 12-Month Price Forecast
The analysis yields a neutral stance due to the tension between MCO's high-quality, profitable business model and its expensive valuation coupled with cyclical and leverage risks. Confidence is medium as the near-term direction is highly contingent on macroeconomic factors influencing capital markets.
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 $0.00 and implied upside of — versus the current price.
Average Target
$0.00
6 analysts
Implied Upside
—
vs. current price
Analyst Count
6
covering this stock
Price Range
$0 - $0
Analyst target range
Wall Street analyst coverage for Moody's is active, with recent ratings from ten major firms. The consensus is positive, featuring actions such as 'Overweight' from Barclays, 'Buy' from Goldman Sachs and Stifel, and 'Outperform' from Evercore ISI and Daiwa Capital. Neutral stances are held by Mizuho, UBS, and Morgan Stanley. No specific consensus target price or ratings distribution percentages are provided in the data, but the overall sentiment from institutional analysts leans bullish.
Bulls vs Bears: MCO Investment Factors
Moody's possesses a formidable, high-margin business with a durable competitive moat, as evidenced by its strong fundamentals and analyst support. However, these strengths are counterbalanced by a premium valuation, significant financial leverage, and recent underperformance, reflecting market concerns about economic cyclicality. The stock is currently in a corrective phase, trading near the lower end of its 52-week range.
Bullish
- Dominant Market Position: Duopoly in credit ratings with S&P creates high barriers to entry.
- Strong Profitability Metrics: High net margin of 32.3% and exceptional ROE of 60.7%.
- Robust Free Cash Flow: Generated $2.82B TTM, supporting dividends and investments.
- Analyst Bullish Sentiment: Major firms like Goldman Sachs and Barclays rate it Overweight/Buy.
Bearish
- Premium Valuation: Trailing P/E of 37.2 and EV/EBITDA of 24.5 are high.
- Elevated Debt Levels: Debt-to-equity ratio of 1.81 indicates significant leverage.
- Weak Recent Price Action: Stock down 14.6% over 3 months, underperforming the S&P 500.
- Economic Sensitivity: Revenue tied to bond issuance, which declines in recessions.
MCO Technical Analysis
The stock's overall trend over the last six months has been volatile but negative, declining 9.5% from October 2025 to the current price of $436.25. It reached a high near $540 in mid-January 2026 before a sharp correction. Short-term performance has been weak, with the stock down 14.6% over the last three months and 8.7% over the past month, significantly underperforming the S&P 500, which fell 4.63% and 5.25% over the same periods, respectively. The current price of $436.25 is near the lower end of its 52-week range of $378.71 to $546.88, sitting approximately 20% below the high and 15% above the low, indicating the stock is in a corrective phase.
Beta
1.45
1.45x market volatility
Max Drawdown
-23.6%
Largest decline past year
52-Week Range
$379-$547
Price range past year
Annual Return
-6.4%
Cumulative gain past year
| Period | MCO Return | S&P 500 |
|---|---|---|
| 1m | -5.1% | -4.3% |
| 3m | -11.7% | -4.0% |
| 6m | -9.1% | -2.0% |
| 1y | -6.4% | +22.2% |
| ytd | -11.7% | -3.8% |
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MCO Fundamental Analysis
Revenue growth has been solid, with Q4 2025 revenue of $1.889 billion representing a 12.98% year-over-year increase from Q4 2024. Profitability remains strong, as the Q4 2025 net margin was 32.3%, consistent with the prior quarter's 32.2%, though down from the 44.7% operating margin indicated in the valuation data. Financial health shows a high debt-to-equity ratio of 1.81, but this is supported by a strong current ratio of 1.74 and robust free cash flow generation of $2.82 billion TTM. Operational efficiency is excellent, with a return on equity of 60.66% and a return on assets of 13.83%, indicating highly effective use of shareholder capital and assets.
Quarterly Revenue
$1.9B
2025-12
Revenue YoY Growth
+0.12%
YoY Comparison
Gross Margin
+0.66%
Latest Quarter
Free Cash Flow
$2.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is MCO Overvalued?
Given the company's positive net income, the primary valuation metric is the P/E ratio. The trailing P/E is elevated at 37.2, while the forward P/E is a more reasonable 23.3, suggesting expectations for earnings growth. The price-to-sales ratio is also high at 11.85, and the EV/EBITDA of 24.5 indicates a premium valuation. Peer comparison data is not available in the provided inputs, so a relative assessment against industry averages cannot be made.
PE
37.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 19x~54x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
24.5x
Enterprise Value Multiple
Investment Risk Disclosure
Moody's faces several key risks. Financially, the company carries a high debt-to-equity ratio of 1.81, which could pressure its balance sheet in a rising interest rate environment or an economic downturn. Operationally, its revenue is inherently cyclical, heavily dependent on global capital market activity and bond issuance volumes; a recession or sustained market slump would directly impact its core ratings business. From a market perspective, the stock's high beta of 1.44 indicates it is more volatile than the broader market, and its recent technical weakness—underperforming the S&P 500 by nearly 10% over three months—suggests waning investor confidence. While regulatory risks are a constant in the ratings industry, the current primary concerns are macroeconomic sensitivity and the stock's rich valuation multiples during a period of market correction.
FAQ
Key risks include economic cyclicality, as revenue from credit ratings falls with bond issuance during downturns. Financial leverage is high, with a debt-to-equity ratio of 1.81. The stock is also volatile, with a beta of 1.44, and is experiencing significant technical weakness, having underperformed the S&P 500 by nearly 10% over the last three months.
The 12-month outlook presents a base case target range of $460 to $500, assuming earnings growth aligns with the forward P/E of 23.3. A bull case (25% probability) could see a return to the 52-week high near $546, while a bear case (20% probability) risks a retest of the 52-week low near $378 if economic conditions worsen. The consensus view is for a moderate recovery.
MCO appears richly valued based on trailing metrics but more reasonably priced on forward-looking estimates. The trailing P/E of 37.2 and EV/EBITDA of 24.5 signal a premium valuation. The forward P/E of 23.3, based on analyst EPS estimates, suggests the market is pricing in future earnings growth, indicating the stock is fairly valued to slightly overvalued in the near term.
Based on current data, MCO is assessed as a Hold, not an immediate Buy. The company's strong fundamentals, including a 32.3% net margin and 60.7% ROE, are attractive. However, its high trailing P/E of 37.2, significant debt (D/E of 1.81), and recent underperformance suggest waiting for a better entry point or more favorable economic conditions.
MCO is more suitable for long-term investors who can tolerate volatility and economic cycles. Its durable competitive advantage and high profitability are long-term assets. Short-term traders face headwinds from the stock's high beta (1.44), recent negative momentum, and premium valuation, which may limit near-term upside.