Moody's Corporation Just Beat EPS By 8.2%: Here's What Analysts Think Will Happen Next

A week ago, Moody's Corporation (NYSE:MCO) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 5.7% to hit US$1.8b. Statutory earnings per share (EPS) came in at US$3.02, some 8.2% above whatthe analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Moody's

After the latest results, the 19 analysts covering Moody's are now predicting revenues of US$6.73b in 2024. If met, this would reflect an okay 2.6% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$10.36, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.63b and earnings per share (EPS) of US$10.18 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 5.2% to US$462despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Moody's' earnings by assigning a price premium. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Moody's, with the most bullish analyst valuing it at US$530 and the most bearish at US$385 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Moody's'historical trends, as the 5.3% annualised revenue growth to the end of 2024 is roughly in line with the 4.9% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 5.6% per year. So although Moody's is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Moody's going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Moody's .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com