Moody’s (MCO) strategic investments across multiple areas could help the company deliver growth in the mid term despite weighing down on its margins currently, RBC Capital Markets said in a note emailed Wednesday.
According to the investment firm, Moody’s $60 million investments in areas including generative AI and new products and enhanced offerings could end up delivering low-to-mid teens revenue growth in the Moody’s Analytics business segment over the mid term.
The firm is also expecting a “potential upside” in the Moody’s Investors Service segment from capital market activity, which, along with growth in the Moody’s Analytics division “bodes well for the stock.”
The firm has an outperform rating on the company’s stock with a price target of $450.