Moody's (MCO) reported first-quarter 2025 adjusted earnings of $3.83 per share, which outpaced the Zacks Consensus Estimate of $3.56. The bottom line grew 14% from the year-ago quarter figure.Shares of MCO lost 1% in pre-market trading as it lowered the 2025 guidance on “market volatility.” Robust global bond issuance volumes and steady demand for analytics supported Moody’s results. The company’s liquidity position was strong during the quarter. However, an increase in operating expenses posed a headwind.A ...

Core Viewpoint - Moody's is expected to report first-quarter 2025 results on April 22, with mixed revenue growth anticipated across its divisions due to various market conditions and strategic efforts. Group 1: Revenue Estimates - The Corporate Finance line is projected to generate revenues of $532.3 million, indicating a marginal rise from the previous year's quarter [2] - The Financial Institutions business line is estimated to bring in $201.1 million, reflecting a 3.1% increase [3] - Public, Project, and Infrastructure Finance revenues are expected to be around $141.2 million, suggesting a slight increase [3] - Structured Finance revenues are anticipated to reach $116.8 million, indicating a 2.5% rise [4] - Overall revenues for the Moody's Investors Service division are estimated at $1.1 billion, implying a 7.3% year-over-year increase [5] Group 2: Moody's Analytics Division - Revenues from the Moody's Analytics division are expected to rise to $868.4 million, representing an 8.7% increase from the prior year [7] - The division's growth is supported by rising demand for analytics and strategic inorganic growth efforts [6] Group 3: Earnings Expectations - The consensus estimate for earnings is $3.57, reflecting a 5.9% increase from the year-ago figure [9] - Sales are projected to be $1.89 billion, suggesting a growth of 5.7% [9] - The likelihood of Moody's beating the earnings estimate is low, with an Earnings ESP of -0.38% and a Zacks Rank of 3 [8]

Core Viewpoint - Analysts forecast Moody's (MCO) will report quarterly earnings of $3.57 per share, reflecting a year-over-year increase of 5.9%, with revenues expected to reach $1.89 billion, up 5.7% from the previous year [1]. Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been adjusted upward by 0.8%, indicating a reassessment by covering analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong relationship between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts predict 'Revenue- Total external customers- Moody's Analytics' at $864.70 million, a year-over-year increase of 8.2% [5]. - 'Revenue- Total external customers- Moody's investor services' is expected to be $1.02 billion, reflecting a 3.5% increase year-over-year [5]. - 'Revenue- Moody's Analytics- Data and Information' is projected to reach $223.22 million, indicating a 5.3% year-over-year change [5]. - 'Revenue- Moody's investor services (MIS) - Intersegment revenue' is estimated at $49.20 million, showing a 4.7% increase from the prior year [6]. - 'Revenue- Moody's Analytics- Research and Insights' is expected to be $237.95 million, a 7.2% increase year-over-year [7]. - 'Revenue- Moody's investor services' is forecasted to reach $1.06 billion, reflecting a 7.3% year-over-year change [7]. - 'Revenue- Moody's Analytics- Decision Solutions' is projected at $404.32 million, indicating a 10.8% increase from the previous year [8]. - 'Revenue- Moody's investor services- Public, project and infrastructure finance' is expected to be $141.20 million, a slight increase of 0.1% year-over-year [9]. - The consensus estimate for 'Revenue- Moody's investor services- Structured finance' stands at $116.83 million, reflecting a 2.5% increase from the prior year [10]. Stock Performance - Moody's shares have decreased by 3.3% in the past month, compared to a 4.2% decline in the Zacks S&P 500 composite [10].

Core Viewpoint - Moody's Corporation (NYSE: MCO) is recommended as a buy due to its strong competitive moat and pricing power, indicating a positive outlook for both of its business segments [1]. Group 1: Investment Thesis - The investment approach focuses on understanding core business economics, including competitive moat, unit economics, reinvestment opportunities, and management quality, which are essential for long-term free cash flow generation and shareholder value creation [1]. - The analyst emphasizes a fundamental, valuation-driven investment strategy, particularly in sectors with strong secular tailwinds [1]. Group 2: Analyst Background - The analyst has 10 years of experience in investment banking and is currently managing personal funds, which were seeded from friends and family [1]. - The motivation for sharing insights on Seeking Alpha is to provide valuable investment analysis and receive feedback from other investors [1].

Core Insights - The company aims to invest in firms with strong qualitative attributes, purchasing them at attractive prices based on fundamentals and holding them long-term [1] - The investment strategy focuses on maintaining a concentrated portfolio to avoid underperformers while maximizing exposure to high-potential winners [1] - The company plans to publish articles on selected companies approximately three times a week, with regular quarterly updates [1] Investment Strategy - The investment approach involves rating companies as 'Hold' when their growth opportunities do not meet the threshold or when downside risks are deemed too high [1] - The company is managed by an MBA graduate with a law degree, currently working as a financial analyst at a large pension fund [1] Analyst's Position - The analyst has a beneficial long position in the shares of SPGI, indicating confidence in the stock's performance [2]

Group 1: Berkshire Hathaway Overview - Berkshire Hathaway reported a 25.5% increase in stock value for the year, continuing its long-term performance of nearly 20% compounded annually since Warren Buffett became CEO [1][2] - The company’s investment portfolio is closely monitored by investors, with quarterly disclosures required for institutional investors with over $100 million in assets [2] Group 2: American Express - American Express has established itself as a premium credit card provider, attracting high-earning customers with exclusive offerings like the Centurion Card and the Platinum Card [4][5] - The company reported a 10% revenue growth to $74 billion and a 25% increase in earnings per share (EPS) to $14.02 last year [7] - Despite a recent stock decline due to earnings guidance, it is viewed as a buying opportunity for long-term investors [7] Group 3: Moody's Corporation - Moody's is the second largest credit rating agency in the U.S. and has been part of Berkshire's portfolio since its spin-off from Dun & Bradstreet in 2000 [8] - The company benefits from high barriers to entry in the credit rating industry and has a competitive advantage due to established reputations [9] - Moody's Analytics segment provides steady income through a subscription-based model, helping to offset weaknesses in its credit ratings business [11][12] Group 4: Chubb - Chubb is a multinational insurance company that has recently been added to Berkshire's portfolio, with 27 million shares acquired in late 2023 and early 2024 [13] - The company has a strong track record of underwriting profitability and has increased its dividend payout for 31 consecutive years [15] - Chubb's investment portfolio of $150 billion allows it to benefit from higher interest rates, resulting in a 20% increase in net investment income to $5.9 billion last year [16][17]