Market Overview

UPDATE: Benchmark Downgrades Moody's on Slowing Growth and Limited Upside

Related MCO
10 Stocks To Watch For February 17, 2017
Earnings Scheduled For February 17, 2017
Tracking Allan Mecham's Arlington Value Capital Portfolio - Q4 2016 Update (Seeking Alpha)

In a report published on Monday, Benchmark analyst Edward J. Atorino downgraded Moody's (NYSE: MCO) from Buy to Hold and maintained a $71 price target on the company.

In the report, Benchmark commented that, "Despite generally favorable bond issuance trends and continued expected strength at Moody's analytics, y/y comparisons for Moody's (MCO) become significantly more difficult in 2H13, with Ratings revenue comping against 35% and 42% growth rates in 3Q12 and 4Q12, respectively. As such, Ratings revenue growth could fall to the low-single digits in 3Q13 and possibly be negative in 4Q13. Higher costs are also expected to limit EPS growth in 2H13. For the year, we expect total revenues of $2.93 billion, up 7.5%, with Ratings revenues of $2.01 billion, up 7% y/y, and Analytics up 9% y/y. EPS is expected to be $3.54, up 16% y/y, with EBITDA of $1.3 billion, up 10% y/y. While we are raising our price target from $60 to $71 based on a P/E multiple of 20x 2013E EPS, which would be the highest P/E multiple in 4 years, we don't see sufficient upside to maintain our Buy rating, and thus are lowering our recommendation to Hold."

Moody's closed on Monday at $65.00.

Latest Ratings for MCO

Feb 2017Morgan StanleyDowngradesOverweightEqual-Weight
Jan 2017BarclaysDowngradesOverweightEqual-Weight
Jan 2017UBSDowngradesBuyNeutral

View More Analyst Ratings for MCO
View the Latest Analyst Ratings

Posted-In: Benchmark Edward J. AtorinoAnalyst Color Downgrades Analyst Ratings


Related Articles (MCO)

View Comments and Join the Discussion!