Moody‘s Corporation (MCO.N): Model Update: Modestly Raise EPS; Roll TP to $600

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Moody‘s Corporation (MCO.N): Model Update: Modestly Raise EPS; Roll TP to $600

Moody's Corporation (MCO.N)

28 July 2026 Citi Research

Valuation

Our $600 target price is based on our targeted forward P/E range at 30x-34x

(34x-38x previously), factoring that the stock will benefit from a continued

credit issuance expansion cycle over the next 12-18 months. Along with the

associated operating leverage with solid MIS growth, we aim to capture MA's

increasing agentic integration of its connected intelligence into client

workflows - we view as an attractive structual and recurring revenue

opportunity. Our targeted P/E range represents a 10%-15% premium

compared to the stock’s normalized P/E range which we justify given

procyclical tailwinds and positive refunding wall narrative.

Risks

Downside risks to our investment thesis and target price include:

• Market Conditions: Roughly ~55% of revenue and ~70% of Moody’s adjusted

operating income is derived from the company’s ratings business where

growth can be volatile during credit issuance expansions and contractions

depending on the underlying health of debt capital markets. As such, growth

in rated issuance can be influenced by (i) the trajectory of benchmark rates

(impacting refinancing volumes and/or issuer loan growth), (ii) the direction of

credit spreads (tighter is positive for issuance, wider is negative), (iii) mix of

rated issuance (HY is typically priced higher than IG), and (iv) the changing

levels in the anticipated funding wall.

• Analytics / Data Demand: Moody’s Analytics has significant user

concentration in financial services, including Banking and Insurance. Should

these markets come under stress, either market or regulatory driven, then

growth for Moody’s Analytics could be negative impacted either through