CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We maintain our target price at $460, on a forward P/E of 36.3x our 2025 earnings estimate, a premium to MCO’s three- and 10-year forward historical averages of 31.9x and 26.4x, respectively, given an improving margin profile and expectations for rapid earnings growth. We increase our 2024 EPS estimate by $0.28 to $11.42 and raise 2025’s by $0.05 to $12.68. MCO posted Q1 adjusted EPS of $3.37 versus $2.99, $0.35 above consensus on revenue of $1.79B (6% above consensus). Leading the outperformance was MIS (the ratings segment), which saw revenue surge 35% Y/Y to $987M, the second highest level on record. However, 8% growth in MA (the analytics segment) disappointed given weakness in Research & Insights. Still, MCO kept its operating expenses (+8%) in check; thus, the firm-wide operating margin expanded 610 bps to 50.7%. With capital markets activity showing signs of life, we view management’s 2024 adjusted EPS guidance ($10.40-$11.00) as overly conservative and likely to be raised in upcoming quarters.