Group 1 - Mizuho raised Moody's target price from $539 to $550 while maintaining a "Neutral" rating [1]

Core Viewpoint - Moody's has placed France's credit rating on watch for a potential downgrade due to political instability and economic challenges, following similar actions by other rating agencies [3][4][5]. Group 1: Credit Rating Changes - Moody's changed its outlook on French government bonds from Stable to Negative, currently rating them Aa3, equivalent to AA- [3]. - S&P downgraded French bonds to A+ from AA- on October 17, 2025, marking a significant shift in the perception of France's creditworthiness [3][4]. - Fitch Ratings had previously downgraded France to A+ from AA- in September, citing government fragmentation and political deadlock [4]. Group 2: Economic Challenges - The political instability in France is seen as a barrier to addressing key policy challenges, including a high fiscal deficit, rising debt burden, and increasing borrowing costs [5]. - France's attempts to reform its pension system and reduce its deficit below 5% of GDP have been unsuccessful, leading to a lack of agreement on the budget [6]. - The resignation of Prime Minister Sébastien Lecornu after just one month in office highlights the ongoing governance issues [6]. Group 3: Market Reactions - The yield on France's 10-year bonds has increased from 3.186% at the end of 2024 to 3.436%, surpassing yields of Greece, Italy, Portugal, and Spain [7]. - Despite the political chaos, French stocks have shown resilience, with the iShares MSCI France ETF gaining 26%, outperforming the S&P 500's 15% rise [8].

Core Viewpoint - Moody's has maintained France's sovereign credit rating at "Aa3" but has downgraded the outlook from "stable" to "negative," contrasting with Fitch and S&P, which both lowered France's rating to "A+" [1] Group 1: Rating Changes - Moody's decision reflects concerns over political instability in France, which may weaken the government's ability to address significant policy challenges [1] - The rating level of "Aa3" is equivalent to "AA-" in the Fitch and S&P systems [1] Group 2: Financial Concerns - Key issues highlighted include high budget deficits, rising debt levels, and increasing financing costs, which could lead to a faster-than-expected deterioration of major fiscal indicators [1] - The report emphasizes the risk of undermining the results of previous structural reforms, particularly the important pension reform measures of 2023 [1] Group 3: Future Outlook - Moody's warns that without effective budget plans to control spending or increase revenue, France's fiscal deficit could expand further and persist for a longer duration [1] - Despite the downgrade, Moody's notes that France's financing capacity remains relatively robust compared to comparable countries like the UK, which holds an "Aa3" rating with a "stable" outlook [1]

Group 1 - Moody's has maintained France's sovereign credit rating at Aa3 but downgraded the outlook from "stable" to "negative" [1] - Moody's is the third major international rating agency to adjust France's sovereign credit rating, following Fitch and Standard & Poor's, which downgraded France to "A+" with a "stable" outlook [1] - The downgrade reflects concerns over weakened institutional and governance capabilities in France, as well as risks of regression in structural reforms [1] Group 2 - The French Minister of Economy and Finance, Roland Lescure, stated that Moody's decision underscores the necessity for France to reach a compromise on its budget [1] - The government aims to achieve a fiscal deficit of 5.4% of GDP by 2025 and to reduce the deficit ratio to below 3% of GDP by 2029 [1] - The IMF report indicates that without policy adjustments, France's fiscal deficit rate is expected to widen to 5.8% in 2026, further increasing to 6.2% in 2027 and 2028, and stabilizing around 6.3% in 2029 and 2030 [1]

Core Viewpoint - Moody's has maintained France's sovereign credit rating at Aa3 but has downgraded the outlook from "stable" to "negative" due to concerns over weakened institutional governance and risks of regression in structural reforms [1] Group 1: Credit Rating Changes - Moody's is the third major international rating agency to adjust France's sovereign credit rating, following Fitch and Standard & Poor's, which downgraded France's rating to "A+" with a stable outlook [1] - The downgrade in outlook reflects concerns about the long-term fragmentation of France's political landscape, which may affect the normal functioning of national institutions [1] Group 2: Fiscal Concerns - Moody's warns that France's fiscal deficit is expected to remain high for an extended period, with projections indicating that the deficit could rise to 5.8% of GDP by 2026 and further to 6.2% in 2027 and 2028, stabilizing around 6.3% in 2029 and 2030 if no policy adjustments are made [1] - The French Minister of Economy and Finance, Roland Lescure, emphasized the necessity for France to reach a compromise on the budget, aiming for a fiscal deficit of 5.4% of GDP by 2025 and below 3% by 2029 [1] Group 3: Legislative Process - The 2026 fiscal bill is currently under review in the National Assembly, with discussions expected to last approximately 70 days before a vote is held in both houses of parliament [2]

Core Insights - The Eurasian Development Bank's report indicates that Kyrgyzstan's debt structure is coordinated and overall manageable [1] - By the end of 2023, Kyrgyzstan's debt-to-GDP ratio is expected to decrease to 49.5%, a reduction of 14.1 percentage points compared to 2020 [1] - Over 80% of Kyrgyzstan's national debt is composed of loans from multilateral development institutions, which feature longer grace periods and lower interest rates [1] - In May 2024, Moody's is expected to upgrade Kyrgyzstan's sovereign credit rating, changing the outlook from "negative" to "stable" [1]

Core Viewpoint - The analyst maintains a buy rating for Moody's Corporation (NYSE: MCO) based on the attractive upside potential over the next two years if the company meets consensus FY28 adjusted EPS expectations [1] Group 1: Investment Philosophy - The investment approach is fundamentally driven, focusing on identifying businesses with potential for scaling and unlocking significant terminal value [1] - Key factors considered include competitive moat, unit economics, reinvestment runway, and management quality, which are essential for long-term free cash flow generation and shareholder value creation [1] - The analyst emphasizes the importance of fundamental research and targets sectors with strong secular tailwinds [1] Group 2: Professional Background - The analyst has 10 years of experience in investment banking and is currently managing personal funds sourced from friends and family [1] - The motivation for writing on Seeking Alpha is to share investment insights and receive feedback from fellow investors [1] - The aim is to help readers focus on the drivers of long-term equity value, with a belief that good analysis should be both analytical and accessible [1]

Core Viewpoint - The analyst maintains a buy rating for Moody's Corporation (NYSE: MCO), anticipating attractive upside potential over the next two years if the company meets consensus FY28 adjusted EPS expectations [1]. Group 1: Investment Philosophy - The investment approach is fundamentally driven, focusing on identifying businesses with potential for scaling and unlocking significant terminal value [1]. - Key factors considered include competitive moat, unit economics, reinvestment runway, and management quality, which are essential for long-term free cash flow generation and shareholder value creation [1]. - The analyst emphasizes the importance of fundamental research and targets sectors with strong secular tailwinds [1]. Group 2: Professional Background - The analyst has 10 years of experience in investment banking and is currently managing personal funds sourced from friends and family [1]. - The motivation for writing is to share investment insights and receive feedback from fellow investors, aiming to help readers focus on long-term equity value drivers [1]. - The analyst believes that good analysis should be both analytical and accessible, contributing value to readers seeking high-quality, long-term investment opportunities [1].

Financial Performance - Revenue for Q3 2025 reached $2,007 million, a 10.7% increase from $1,813 million in Q3 2024[16] - Operating income for Q3 2025 was $917 million, up 24.3% from $738 million in Q3 2024[16] - Net income attributable to Moody's for Q3 2025 was $646 million, representing a 21% increase compared to $534 million in Q3 2024[16] - Earnings per share (EPS) for Q3 2025 were $3.61, a 22.7% increase from $2.94 in Q3 2024[16] - Comprehensive income for the nine months ended September 30, 2025, was $1,951 million, compared to $1,728 million for the same period in 2024[19] - Net income for the nine months ended September 30, 2025, was $1,851 million, an increase from $1,664 million in 2024, representing a growth of 11.2%[24] - Total external revenue of $5,829 million for the nine months ended September 30, 2025, up from $5,416 million in the same period of 2024, representing a growth of 7.6%[52] - Adjusted Operating Income for the three months ended September 30, 2025, was $1,062 million, compared to $867 million for the same period in 2024, reflecting a year-over-year increase of 22.5%[127] Assets and Liabilities - Total assets as of September 30, 2025, were $15,415 million, slightly down from $15,505 million at the end of 2024[22] - Total liabilities decreased to $11,303 million from $11,778 million at the end of 2024, indicating improved financial health[22] - Cash and cash equivalents stood at $2,181 million, down from $2,408 million at the end of 2024[22] - Total shareholders' equity increased to $4,068 million as of September 30, 2024, up from $3,938 million at June 30, 2024, reflecting a growth of 3.3%[25] - As of September 30, 2025, total shareholders' equity stood at $4,112 million, an increase from $3,727 million at the end of 2024[35] - The company reported a total long-term debt of $7,168 million, with a carrying value of $6,983 million after adjustments for unamortized discounts and issuance costs[110] Cash Flow and Investments - Net cash provided by operating activities decreased to $2,043 million in 2025 from $2,164 million in 2024, a decline of 5.6%[24] - Cash flows from investing activities showed a net inflow of $44 million in 2025, a significant recovery compared to a net outflow of $875 million in 2024[24] - The company repurchased treasury shares amounting to $1,170 million in the nine months ended September 30, 2025, compared to $812 million in the same period of 2024[24] - Dividends paid in the nine months ended September 30, 2025, totaled $534 million, an increase from $465 million in 2024, marking a rise of 14.8%[24] Revenue Segmentation - Decision Solutions (DS) revenue for the third quarter of 2025 was $424 million, a 10.7% increase from $383 million in the third quarter of 2024[50] - Research and Insights (R&I) revenue increased to $252 million in Q3 2025 from $235 million in Q3 2024, reflecting a growth of 7.2%[50] - Data and Information (D&I) revenue rose to $233 million in Q3 2025, compared to $213 million in Q3 2024, marking a growth of 9.4%[50] - Corporate Finance (CFG) revenue for the third quarter of 2025 was $576 million, up from $515 million in the same quarter of 2024, an increase of 11.8%[51] - Total ratings revenue for the third quarter of 2025 was $1,091 million, a 12.0% increase from $974 million in Q3 2024[52] Restructuring and Efficiency - The company reported a restructuring charge of $21 million in Q3 2025, up from $6 million in Q3 2024, indicating ongoing adjustments in operations[16] - The Strategic and Operational Efficiency Restructuring Program is expected to yield annualized savings of $250 million to $300 million, with completion anticipated by the end of 2026[96] - Total restructuring expenses for the three months ended September 30, 2025, amounted to $21 million, while for the nine months, it was $81 million, leading to a cumulative expense of $126 million[97] Tax and Compliance - The effective tax rate (ETR) for the nine months ended September 30, 2025, was 24.2%, up from 23.5% in the same period of 2024, reflecting an increase of 0.7%[68] - The company paid $644 million in income taxes for the nine months ended September 30, 2025, compared to $391 million for the same period in 2024, indicating a significant increase of 65%[72] - The company expects to reverse $64 million in reserves for uncertain tax positions in the fourth quarter of 2025 due to a lapse of a statute of limitations[71] Employee and Stock Compensation - The company granted 0.1 million employee stock options with a weighted average grant date fair value of $163.59 per share during the first nine months of 2025[64] - Stock-based compensation expenses rose to $174 million in 2025 from $166 million in 2024, reflecting a growth of 4.8%[24] - The total number of employees decreased by 2% to 15,952 as of September 30, 2025, compared to 15,776 in the previous year[147] Market and Segment Insights - Moody's has two reportable segments: MA (Moody's Analytics) and MIS (Moody's Investors Service), focusing on integrated risk assessment solutions and credit ratings respectively[38] - Moody's Analytics (MA) external revenue increased by 9% to $909 million, driven by sustained demand for insurance and KYC offerings, as well as credit research products[146] - Moody's Investors Service (MIS) external revenue rose by 12% to $1,098 million, supported by strong investor demand and increased leveraged finance issuance[146]

Core Insights - Moody's Corporation has been ranked 1 in the 2026 Chartis RiskTech100® report, marking its fourth consecutive year at the top of the ranking [1] - The RiskTech100® is recognized as a leading guide for risk and compliance technology providers, highlighting Moody's industry-leading solutions and commitment to customers [1] - Moody's sustained leadership is attributed to a clear strategy and dedication to innovation in risk management technology [1]