Moody's (MCO) Stock Forecast & Price Target

Moody's Corporation (MCO) anticipates a robust pipeline for the second half of 2025, expecting a year-over-year increase in revenues, with the Moody's Investors Service (MIS) segment projected to yield a 12% rise, significantly surpassing consensus expectations. The recent uptick in billed issuance, which recorded a 23% year-over-year increase in August, coupled with strong growth in high-yield issuance, indicates a favorable environment for revenue generation through both non-recurring and recurring segments. Additionally, Moody's management is likely to revise its revenue and earnings per share guidance upward, reflecting improved market conditions and a positive outlook on capital markets and M&A activities.

Moody's stock faces a negative outlook primarily due to its heavy reliance on the credit ratings segment, which generates approximately 61% of its revenue and 76% of adjusted operating income, making it vulnerable to macroeconomic factors such as credit issuance declines. A sequential slowdown in Moody's Analytics' annual recurring revenue (ARR) growth from 9% to 8% — influenced by terminations of strategic partnerships and account losses — compounds concerns about the firm’s revenue stability. Furthermore, ongoing risks including significant declines in credit issuance, increased competition, and potential slowdowns in various service demands create substantial headwinds that could adversely impact future earnings growth.