Why Moody's Stock Is Gaining Today

  • Moody's Corp (NYSE: MCO) reported a first-quarter FY23 revenue decline of 3% year-on-year to $1.47 billion, beating the consensus of $1.41 billion.
  • Revenue for MIS was $733 million, down 11% Y/Y as ongoing uncertainty around inflation, interest rates, and recessionary concerns broadly impacted credit markets. Foreign currency translation unfavorably impacted MIS revenue by 1%.
  • Moody's Analytics revenue grew 6% Y/Y to $737 million on strong demand for Know Your Customer and Insurance solutions and rating data feeds.
  • Corporate finance revenue was $356 million, down 15% Y/Y, mainly due to the decline in leveraged finance issuance.
  • The adjusted operating margin contracted 360 bps to 44.6%.
  • Adjusted EPS of $2.99 beat the consensus of $2.20.
  • Moody's held $2.2 billion in cash and equivalents and generated $535 million in free cash flow.
  • Dividend: On April 24, the board declared a regular quarterly dividend of $0.77 per share.
  • FY23 Outlook: Moody's expects growth in the mid-to-high-single-digit percent range for FY23.
  • Moody's raises FY23 adjusted EPS outlook to $9.50 - $10.00, up from the prior $9.00 - $9.50 above the consensus of $9.27.
  • Price Action: MCO shares traded higher by 2.34% at $309.78 on the last check Tuesday.

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